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Comments, Feedback and Criticism of my Presentations on Canada's Gas Supply

I have presented parts or variations of this paper to a number of Industry representatives plus technical conferences, (CSPG, Canadian Institute, CSUG), Regulatory bodies (AEUB, NEB), Academic groups (University of Calgary), the Press (CBC, Globe and Mail, National Post etc) and various Publications (Oilweek, World Oil, Hart's E&P, CSPG Reservoir, CSEG Recorder) .

Nobody with knowledge of the industry has had any particularly strong arguments to refute my conclusions (They may not like it but they don't disagree with my assessment). I strongly encourage you to e-mail me with any comments that would make my information more complete or accurate.

Thank you,

Dave Russum

Specific issues and expanded responses are covered below:

1. Note: the Daily Oil Bulletin of November 19th was a little aggressive with their article "Drastic Drop Foreseen In Canadian Gas Output ".

My prediction of the 2016 Canadian gas production is 2.2Bcf/d below 2002 levels (including unconventional gas) not the 5Bcf/d quoted by the DOB.(see Slide #46 of the Adobe Presentation accessed from the main page). This prediction is 5.5Bcf/d below the NEB's expectation of Canada's gas supply in 2016. The headline should probably have been "Serious Drop ........" rather than "Drastic Drop ........."!

The DOB published a "Clarification" on this point (November 22nd 2004).

2. "You should have mentioned manpower as a hurdle that needs to be overcome".

I agree completely, this was a synthesis of a number of other presentations where manpower was mentioned. It was oversight on my part not to include the expected shortage of manpower as an issue for the future of the Industry.

3. "Why didn't you include Alaska gas in future predictions?"

My future predictions were for Canadian gas supply. When Alaska joins Canada I will add it to the graph.

4. "Reserve replacement costs for BOE (barrels of energy equivalent) which includes oil is not relevant to a paper on gas" (Slide 23)

I have been unable to find any detailed International costs related solely to natural gas. I would welcome this information if anybody can provide it.

5. "You should include expansion of Northern gas production once a pipeline to the north is completed"

This is a fair comment, if anybody has some realistic projections of the magnitude and timing of this expansion I would be happy to include it. My data includes the inital pipeline and increased compression to bring production to 1.8Bcf/d by 2012.

6. "What impact will gas hydrates have on Canada's future gas production?"

Gas hydrates (gas trapped in a lattice of ice), they occur below the permafrost in the Arctic and below the sea floor in various parts of the World. They are a huge potential resource however we do not have the technology to produce them at this time. They fall clearly in my red category of resources (Slide #9).

In addition, Canada's gas hydrates occur in some of the most inhospitable areas of the World or in areas off-limits to exploration; there are many other areas of the world that would be more attractive for gas hydrate production before Canada. However, we must greatly expand are research into all forms of energy if we are to remain competitive in the modern world.

7. Note: The slide comparing Texas to Alberta (Slide 25):

The y-axis on the Texas graph should read "Bcf/year" not "Bcf/day"

8. Note: The slide showing historic production for North America (Slide 21):

The pale blue wedge should read "USA Coalbed Methane", an additonal wedge of similar proportions should be subtracted from the dark blue to reflect other unconventiaonal gas (Tight gas, Basin Centred Gas, Shale gas etc)

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