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Alberta’s Shale and Tight Resources

A product of the Energy and Mines Ministers’ Conference

Alberta’s Oil and Gas Resources

  • 31 TRILLION CUBIC FEET
    Conventional Natural Gas Reserves
  • 3,424 TRILLION CUBIC FEET
    Shale and Siltstone-Hosted Hydrocarbon Resource In-Place, Gas
  • 1 BILLION BARRELS
    Conventional Crude Oil Reserves
  • 166 BILLION BARRELS
    Bitumen Reserves
  • 423.6 BILLION BARRELS
    Shale Oil In-Place
  • 9.4 BILLION CUBIC FEET/DAY
    Conventional Natural Gas Production (2014)
  • 0.1 BILLION CUBIC FEET/DAY
    Shale Gas Production (2014)
  • 0.6 MILLION BARRELS/DAY
    Conventional Crude Oil Production (2014)
  • 2.3 MILLION BARRELS/DAY
    Crude Bitumen Production (2014)
  • N/A MILLION BARRELS/DAY
    Shale Oil Production (2014)
  • The “in-place” resource estimates (“resource endowment”) should not be confused with recoverable reserves. The recoverable portion of shale hydrocarbon resources is generally determined after drilling and completing a well. “Reserves” is the volume of oil or natural gas that can be recovered under current technical and economic conditions.
  • The Alberta Energy Regulator includes low permeability non-shale oil and gas reserves (often considered as “tight” oil and gas) with conventional oil and gas reserves due to historical and administrative reasons.
  • As of 2014, the bulk of Alberta’s natural gas was produced from conventional sources.

Source:

Today, more than half of Western Canada’s oil and natural gas wells are being drilled horizontally, and since 2013, an estimated 80 percent of all oil wells placed on production in Alberta utilized horizontal drilling techniques.

Hydraulic fracturing has been safely used on over 180,000 oil and gas wells in Alberta since the technology was introduced in the 1950s. Since 2008, more than 10,000 wells have been completed in Alberta using the combination of multi-stage hydraulic fracturing and horizontal drilling techniques.

Geography

The geography of Alberta’s shale resources are summarized in Figure 1 below.

Figure 1: Map of Alberta's Shale Formations
Source: Alberta Energy Regulator (2014) (PDF, 1.3 MB)

Text version

Figure 1: Map of Alberta's Shale Formations

Map of Alberta highlighting the major prospective shale gas formations. From North to South: Muskwa, Montney, Duvernay and Exshaw/Lower Banff.

Geology

Figure 2 presents the basins of the Western Canadian Sedimentary Basin.

Figure 2: Overview of Western Canadian Sedimentary Basin
Source: Alberta Energy Regulator (2014) (PDF, 1.3 MB)

Text version

Figure 2 presents the basins of the Western Canadian Sedimentary Basin.

Map of the basins of the Western Canadian Sedimentary Basin, extending from the southern areas of the Yukon and Northwest Territories to southern Manitoba. From west to east: Liard Basin, Horn River Basin, Alberta Basin and Williston Basin.

The Alberta Energy Regulator (AER) refers to tight oil and gas and shale gas as follows:

  • Tight Oil: oil found in low-permeability rock, including sandstone, siltstone, shale, and carbonates
  • Tight Gas: natural gas found in low-permeability rock, including sandstone, siltstones, and carbonates
  • Shale Gas: natural gas locked in fine-grained, organic-rich rock

In 2012, the Energy Resources Conservation Board (ERCB), now the AER, released a report on Alberta’s shale- and siltstone-hosted gas and oil potential. The report provides baseline data, information and an understanding of the geology, distribution, reservoir characteristics, and gas and oil resource potential of key shale and siltstone units in Alberta.Footnote 11

The study concluded that shale- and siltstone-hosted gas and oil in-place resources are very large. The Duvernay Formation, the Muskwa Formation, the Montney Formation, the Nordegg Member, and the basal Banff and Exshaw formations (sometimes referred to as the Alberta Bakken by industry) show immediate potential. It is important to note that the Montney Formation is dominated by siltstone but that it also includes some zones of shale and sandstone.

Further information can be found in the AER’s Alberta’s Energy Reserves & Supply/Demand Outlook, 2014 (PDF, 4.2 MB) Statistical Report or its supporting infographic (PDF, 2.5 MB).

Exploration and Production

As opposed to primary conventional oil and natural gas development where production can be obtained by simply drilling a well to let the resource flow to the surface, unconventional resources are trapped in rock with limited or no flow pathways. Given this, methods to “crack” or “fracture” the rock are needed to allow the oil and gas to flow up through the well. 

Advancements in technology have enabled industry to develop unconventional resources. Currently, hydraulic fracturing, horizontal drilling and multiple wells drilled on a pad – along with various combinations of the above in certain instances – are the three main methods used to develop unconventional resources. This AER video on hydraulic fracturing will explain the typical processes used in Alberta to drill, complete and bring into production unconventional oil or gas.

Hydraulic fracturing has been safely used in Alberta on more than 180,000 wells since the technology was introduced in the 1950s. Since 2008, more than 10,000 wells have been drilled in Alberta using the combination of multiple-stage hydraulic fracturing and horizontal well drilling for oil and gas development. The AER requires all companies to disclose information on fluids used in hydraulic fracturing operations. This information is publicly available at FracFocus.

There are two types of hydraulic fracturing: 

  • Single Stage Hydraulic Fracturing: A single stage fracturing treatment that involves the use of one stage of fracturing in the wellbore. 
  • Multiple-Stage Hydraulic Fracturing: A multiple-stage fracturing treatment that involves the use of more than one stage of fracturing in the wellbore.  It combines the well-established techniques of horizontal drilling and high-pressure hydraulic fracturing at multiple intervals along the horizontal portion of the well. Multiple-stage fracturing is a relatively new technology that has opened up resources that were previously inaccessible in Alberta and globally.

Regulation

The Government of Alberta provides policy direction to the AER, which regulates all oil, natural gas, oil sands and coal development activity in the province.  Through this collaboration, Alberta Environment and Parks (AEP), Alberta Energy and the AER have identified policy and regulatory enhancements related to:

  • Water management  
  • Groundwater protection
  • Wellbore integrity
  • Air quality
  • Noise and light
  • Induced seismicity

These enhancements are further discussed in the Regulation of Production section.

AER is currently piloting a Play-Based Regulation (PBR) project, which will allow the AER to test, on a limited scale, a new framework to govern unconventional oil and gas development.  PBR will assess projects on a regional scale and will improve the evaluation of issues such as surface infrastructure needs and impacts, wellbore integrity, and water and air impacts on a broader scale. 

Regulation of Exploration

The AER’s exploration regulations specify what the geophysical industry must do in their day-to-day activities involving geophysical operations to ensure regulatory compliance. Complementary exploration directives specifically outline how operators must conduct these field activities in accordance with the exploration regulations.

Regulation of Production

A complete list of all AER directives is available here.

Water Management

The Government of Alberta has an established water policy and legislation that protects the quality and quantity of water in upstream oil and gas operations. The Water for Life: Alberta’s Strategy for Sustainability sets the overall direction for managing Alberta’s water resource.

For oil and gas operations, AEP has a water conservation policy for projects that conduct long-term water injection to enhance the recovery of oil. The Water Conservation and Allocation Policy for Oilfield Injection, 2006 (PDF, 1.4 MB) is applicable to conventional water flooding and oil sands thermal in-situ operations.

Groundwater Protection

The Government of Alberta, through the AER, has regulatory requirements that are designed to prevent hydraulic fracturing fluid from mixing with groundwater and surface water.

AER Directive 083: Hydraulic Fracturing – Subsurface Integrity mandates that licensees demonstrate that operational risks have been considered in the selection and design of the wellbore construction and to monitor and test to ensure that well integrity is maintained.

Through Directive 059: Well Drilling and Completion Data Filing Requirements, the AER requires disclosure of hydraulic fracturing fluid composition, and water source and volume data on a well-to-well basis.  Once reported, information about what chemicals are used can be obtained from FracFocus.

Any fluid that is returned to the surface from hydraulic fracturing operations must be handled under strict guidelines mandated and enforced by the AER. Even if the fluid is treated, it cannot be released back into a natural water body. The following directives refer to the storage and management of fluids:

Wellbore Integrity

The AER has strict requirements for cemented casing (wellbore construction includes the use of steel casing that is cemented into the wellbore) in wells to provide a barrier between the wellbore and any nearby water sources. 

Air Quality

Air quality is important to the quality of life and the health of all Albertans. The Alberta Ambient Air Quality Objectives and Guidelines set out acceptable minimal levels to ensure safety and environmental protection related to air quality.

The AER uses Directive 60: Upstream Petroleum Industry Flaring, Incinerating and Venting to regulate flaring and incineration through performance and reporting requirements, permits and data collection.

Noise and Light

Residents close to unconventional resource operations may experience noise and light impacts. To mitigate this, the AER’s Directive 56: Energy Development Applications and Schedules sets notification and consultation requirements and determines proximity requirements for oil and gas wells from residential structures. 

As well, AER Directive 038: Noise Control sets out requirements for noise control for all operations and facilities under the jurisdiction of the AER, and outlines an approach to deal with noise problems. AER also works closely with municipalities and communities by providing information about potential developments to support their preparation for increased traffic and/or other concerns.

Induced Seismicity 

Induced seismicity refers to earthquakes (seismic events) resulting from human activity. The AER monitors seismic activity across Alberta using the Regional Alberta Observatory for Earthquakes Studies Network (RAVEN) and networks operated by Natural Resources Canada, the University of Alberta, University of Calgary, Montana Bureau of Mines and Geology and the University of Western Ontario.  Data collected from these stations are also used to document natural and induced earthquakes which are compiled into a comprehensive earthquake catalogue, or seismic database for Alberta.  Further information about the Alberta Earthquake Studies Project and seismic activity in general can be found on the Alberta Geological Survey (AGS) website.

Public Research

The Government of Alberta has several public resources available on unconventional resource production and hydraulic fracturing (some of these links are presented below). In addition, FracFocus is a collaborative initiative between provinces, territories, regulators and industry to provide the public with objective information on hydraulic fracturing, particularly with regard to legislation and regulations in place to help protect the environment including groundwater, and transparency on the components that make up hydraulic fracturing fluids.

Energy and Mines Ministers’ Conference

Alberta

Alberta Energy, Shale Gas
Alberta Energy Regulator, What is Unconventional Oil and Gas?
Alberta Energy Regulator, Play-Based Regulation Pilot Project
Alberta Energy Regulator, Best-in-Class Regulator Project
Alberta Energy Regulator, Statistical Reports
Alberta Environment and Parks, Groundwater Observation Well Network

 

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