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Nat gas prices cool drilling activity in Ft.Nelson, B.C.

August 22, 2012

Lower natural gas prices have caused drilling activity to drop off by 1/5th in Ft.Nelson. Meanwhile BC Hydro upgraded its gas-fired electricity generating station.

Fort Nelson sits on one of the largest natural gas reserves in the world, but Petroleum Services Association of Canada President Mark Salkeld said that only 485 wells will be drilled in B.C. in 2012 instead of rougly 620 that were expected, mainly due to declining natural gas prices.

BC Hydro operates a gas-fired electricity generating station located 16 kilometres south of Fort Nelson. The plant had a maximum generating capacity of 47 megawatts under ideal conditions in winter and 40 megawatts in summer. BC Hydro late in 2011 increased the plant’s capacity by a further 50 megawatts to 71.5 megawatts. It is a $149 M capital project for BC Hydro.

Fort Nelson is home to about 4,800 residents. The town is experiencing healthy growth due to the Horn River Basin unconventional gas play where 11 major companies plus a number of smaller players have invested heavily in shale gas development. Since 2008, the Ft.Nelson airport has seen double-digit growth, each year, in the number of passengers travelling on scheduled flights: 2011 alone saw an almost 22% jump in scheduled passenger traffic. This pales in comparison to the 134% rise in the count of those travelling by charter however, with Boeing 737s conveying the majority of these passengers. Figures for rotary aircraft also climbed at the significant rate of nearly 20% during the past year.


Ft.Nelson is thriving as the service community for the Horn River basin shale gas activity. Low natural gas prices since the start of 2012 have slowed the rate of growth, but economic activity continues and the community grows.