What is Natural Gas?

Natural gas is mostly methane, but also contains other compounds such as ethane, propane, butane and pentanes – these are called natural gas liquids (NGLs). Natural gas may also contain sulphur compounds, nitrogen, carbon dioxide, water and other substances.

Geology schematic graphic showing where natural gas and oil comes from below the earth.

International Energy Agency

Where Does Natural Gas Come From?

Natural gas was formed millions of years ago when heat and pressure transformed decaying plant and animal matter buried in sedimentary rock layers. Normally, natural gas is trapped under layers of rock that prevent it from flowing easily to the surface.

Virtual Reality

Experience the magic of virtual reality (VR) and learn about natural gas exploration firsthand. The natural gas VR takes viewers onto the floor of an operating drilling rig and uses animation to explain hydraulic fracturing. 

VR incorporates video, audio and animation, but goes beyond flat-screen video to create a one-of-a-kind experience that puts the viewer in the heart of the action. The beauty of VR is how it allows the viewer to be in situations that would normally be inaccessible.  

The VR app can be downloaded to your mobile device or desktop for free by clicking the links below.  

Google Play: CAPP Oil Sands and Natural Gas VR  

Apple Store: CAPP Oil Sands and Natural Gas VR  

You can watch a 360 degree version suitable for viewing on a flat screen if you don’t have a VR headset. To navigate the 360 degree video version click and hold, within the video and drag in the direction you wish to view. 

Bonus – CAPP offers two other VR experiences explaining oil sands mining and in situ operations.  

Types of Natural Gas

Natural gas is extracted from beneath the earth’s surface using a variety of methods depending on geology. Natural gas resources are known as either conventional or unconventional.

  • Conventional natural gas is trapped in reservoirs in porous rock such as sandstone. This natural gas is easy to produce using traditional drilling methods. Most conventional reserves in Canada have been extensively developed.
  • Unconventional natural gas is found in tight (non-porous) rock formations, such as shale. These resources are recovered through a combination of horizontal drilling and hydraulic fracturing. Using these methods to produce natural gas that was previously inaccessible with traditional drilling has greatly increased Canada’s recoverable natural gas reserves. Another benefit is the ability to drill multiple wells from the same well pad on the surface, allowing for greater resource recovery on a reduced land footprint.
CCEI map of natural gas national

Where is Natural Gas Found in Canada?

Conventional natural gas production in Canada is mainly from the Western Canada Sedimentary Basin (WCSB) in British Columbia, Alberta, and Saskatchewan, with smaller volumes produced in Ontario and New Brunswick. Unconventional natural gas is primarily located in northeast British Columbia and northwest Alberta.

Source: Canadian Centre for Energy, 2013

Natural Gas Production in Canada’s Offshore

Nova Scotia produced natural gas until late 2018. Two natural gas projects – the Sable Offshore Energy Project and Deep Panuke – finished producing in 2018 and the projects are being decommissioned.

However, Nova Scotia’s resource potential is significant. The Government of Nova Scotia estimates there is a potential 120 trillion cubic feet of natural gas and 8 billion barrels of oil offshore.

Economic Benefits of Natural Gas

Natural gas development is an important part of Canada’s economy.

The industry contributes to Canada’s overall economic health through jobs, taxes and royalties paid to provincial and federal governments. In turn, this revenue helps governments pay for health care, education, infrastructure and social programs.

While the natural gas market has been challenged by a number of factors including growing US production and a lack of pipeline infrastructure in the Western Canadian Sedimentary Basin (WCSB), Canada’s natural gas industry has a bright future if we are able to build a liquefied natural gas (LNG) industry to supply Canadian natural gas to Asian markets. Based on 2018 CAPP data, the economic impacts of supporting a Canadian LNG industry are significant and estimates include:

  • Generate $2.4 billion toward Canada’s GDP in direct or indirect activity
  • Employment growth on a national level increases by 10,000 direct or indirect jobs
  • Annual government revenues (corporate, personal, indirect taxes and royalties) for the provincial and federal governments

Canada's Natural Gas Fact Book

Canada’s Natural Gas Fact Book was designed to give readers fast, easy access to natural gas facts that allow them to participate in a balanced discussion about energy, the economy and the environment.