CHAT News File Photo

By Brian Konrad

Demand driving prices higher

Rising natural gas prices won’t deter city’s plan to abandon unproductive wells

Aug 18, 2021 | 11:26 AM

MEDICINE HAT, AB — Natural gas prices are on the rise as demand outpaces supply around the world.

However, the chair of the City’s of Medicine Hat’s energy and infrastructure committee says the rebound in prices isn’t enough to change the city’s plans to abandon more than 2,000 natural gas wells.

Two years ago, the city, through its Natural Gas and Petroleum Resources division, embarked on a program to abandon and reclaim the wells.

The decision was made at a time when prices for natural gas were near rock bottom.

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Coun. Phil Turnbull says the city will go ahead with those plans.

“We’re only closing the wells that are not very productive,” says Turnbull.

“If you don’t produce enough gas, it doesn’t matter what the price is because you just can’t make money,” according to Turnbull.

He says it costs money to maintain the well and that work is done by people who have to be paid.

The city will still have between 700 and 900 wells in the field northeast of the landfill, and Turnbull hopes prices for that natural gas will be high enough to cut the losses in the NGPR and pay for the costs to reclaim the wells being abandoned.

Turnbull notes prices remain volatile and producers aren’t drilling new gas wells because they don’t want to gamble on prices remaining stable.

The city also has to pay higher prices for the natural gas needed at Units 16 and 17 to generate electricity, as they need high-pressure gas the city doesn’t have.