Canada’s natural gas producers are facing a significant risk in the coming years, according to a recent report by Deloitte. The report highlights the potential impact of drought on the industry, specifically in the year 2024.
The study, titled “Drought Risk and Canada’s Natural Gas Producers,” examines the potential consequences of drought on the natural gas sector. It predicts that by 2024, drought could result in a 10% decrease in natural gas production, leading to a loss of approximately $1.3 billion in revenue for Canadian producers.
The report also notes that the effects of drought on natural gas production are not limited to Canada. The United States, which is a major competitor in the global natural gas market, is also expected to experience a decrease in production due to drought.
According to Deloitte, the key factor contributing to this risk is the reliance of natural gas production on water resources. Natural gas production requires large amounts of water for hydraulic fracturing, a process used to extract gas from shale formations. With drought conditions becoming more frequent and severe, the availability of water for this process is expected to decrease.
The report also highlights the potential for increased competition for water resources between the natural gas industry and other sectors, such as agriculture and municipal use. This could further exacerbate the impact of drought on natural gas production.
In response to these risks, Deloitte suggests that natural gas producers should prioritize water management strategies and invest in alternative technologies that require less water. The report also recommends collaboration between the industry and other stakeholders to find sustainable solutions to mitigate the impact of drought on natural gas production.
Overall, the report serves as a warning to Canada’s natural gas producers to be prepared for the potential consequences of drought on their industry. With the year 2024 fast approaching, it is crucial for the industry to take proactive measures to mitigate the risks and ensure the sustainability of natural gas production in the face of changing environmental conditions.
