On nearly every foray I’ve taken to Western Canada over the years, one slogan has followed me endlessly…
“We have the energy.”
It’s been stuck in my head since the first time I stepped foot into Fort McMurray.
But my last excursion may prove to unhinge that lasting impression.
A few months ago, I had arrived at a town in northeastern British Columbia at the tail end of a ten-hour-long car trip.
It was here that I was greeted by a sign similar to the one at Fort McMurray:
Fort Nelson rests right next to a massive natural gas deposit.
This wealth of gas resources is going to help feed billions of dollars into British Columbia over the next several decades, thanks to the country diversifying its customer base and tapping into rich new markets across the Pacific Ocean.
Of course, BC’s newfound fortune certainly won’t come as a surprise to us.
We know Alberta’s monopoly over Canada’s energy industry may be over sooner than they’d like.
But it’s not just the province that’ll see a windfall of cash on the country’s future energy exports…
Individual investors are lining up right alongside it.
One Province to Rule Them All
With depressed gas prices plaguing Canada and the United States, opening new doors to the Far East will turn out to be the best move Canada has made since first exporting its production to the United States in 1889.
And it couldn’t have come at a better time.
While I was making my way through Fort Nelson that day, I had a painful realization…
Canada’s supply is better suited elsewhere than the United States.
In fact, the reason most people have never even heard of the Horn River Basin is because of its distance from the U.S.
Remember, these BC producers have to pipe their gas a long way to reach U.S. markets.
When you’re sitting on the third largest shale deposit in North America (easily the biggest in Canada), companies won’t wait around to develop it — especially when there are customers (read: Asia) willing to pay four times the average price for your product.
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There’s no doubt in my mind that British Columbia is the rising star in Canada’s natural gas industry.
And there’s more than one reason to be excited about the province’s future.
I have a feeling that two areas in particular will become household names within the next few years.
The first happens to be the third largest shale deposit in North America (easily the biggest in Canada):
We’ve talked about the Horn River Basin for the past few years, and things are really starting to heat up there.
What’s more, the 500 trillion cubic feet of natural gas in the deposit (approximately 96 Tcf is believed to be recoverable) will prove very tempting for producers.
The second place to watch is the Montney Formation, located in BC’s Dawson Creek area.
Four years ago, the Montney Shale was one of the reasons British Columbia was attracting so much attention from gas producers.
Some of my longtime readers might remember back in 2008, when the province was breaking records at its oil and gas auctions…
BC made approximately $1.55 billion from just three auctions in May, July and August, totaling more than $2.2 billion for the year.
Time for Investors to Act
I mentioned earlier the burgeoning trade relationship between China and Canada. Now, I realize there are people who still aren’t convinced the Canadians are holding all the cards…
I also told you last year that if you’re waiting for the natural gas supply glut to ease before making your move on Canada’s unconventional resources, you might want to rethink your strategy.
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Until next time,
Keith Kohl
A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
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