Drought conditions in Canada could impact natural gas producers: report [Video]

Persistent drought conditions are poised to challenge natural gas producers even as they aim to ramp up in anticipation of Canada’s first liquefied natural gas export terminal opening, a new report warns.

The report by Deloitte Canada identifies potential water shortages in Western Canada as a key risk facing the oil and gas sector in 2024.

Some of the most extreme drought conditions currently are in northeast B.C. and northwest Alberta, a region that is the epicentre of Canada’s natural gas drilling industry.

The report notes Alberta’s government has already set up a drought advisory panel to begin water usage negotiations, while B.C. Premier David Eby has called his province’s situation “the most dramatic drought conditions that we’ve seen.”

Water use is important for the natural gas industry — most development in Canada today involves hydraulic fracturing, a process that uses a combination of water, sand and chemicals to develop pathways to bring the gas to …