As Canadian oil and gas producers look to notch record outputs this year, severe droughts in Western Canada could rain on their parade — not literally, given, ya know, the droughts.
Driving the news: A new Deloitte report warns that oil and gas producers could have trouble sourcing water for their operations, as some of Canada’s driest places — northwest Alberta and northeast B.C. — just so happen to be the centre of oil and gas country.
- Water is used in the fracking process, alongside a mixture of sand and chemicals, to blast underground rock formations and create access to oil and natural gas reserves.
Why it matters: Per the Alberta Energy Regulator (AER), ~99% of the water used for fracking is fresh water, which is now so hard to come by that the AER is limiting how much oilsands and other energy projects can withdraw from part of the Athabasca River and other rivers.
- Meanwhile, B.C. has suspensions on all water withdrawals from select water sources in the Fraser, Peace, and Liard River Watersheds and could add more restrictions.
Big picture: With the Trans Mountain pipeline expansion finally operating this year and the natural gas export facility in B.C. slated to open next year, an oil and gas boom could happen as access to the Asian market emerges — so long as there’s enough product.
Zoom out: Natural gas isn’t the only type of energy hampered by droughts. In provinces where hydropower is king, there are concerns about its reliability as a power source (like in Manitoba) and its viability as a money-making export (like in Québec).—QH