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Frequently Asked Questions

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NGPR Long-term Growth Strategy
NGPR uses gas and oil revenue to fund its operations and provide an additional source of revenue to the City of Medicine Hat. Both commodities are experiencing historically low pricing and this situation is expected to continue for the foreseeable future. As a result NGPR requires additional revenue sources. The NGPR team of professionals believes that significant additional revenue will be generated from the successful implementation of a long-term growth strategy.

Why is the price of oil so low?

United States (U.S.) oil production has increased dramatically over the last few years, at the same time that supply from the Middle East has also increased. Demand for oil has been sluggish in Asia. The combination of increased supply and decreased demand has resulted in low pricing. This situation should improve over time as the new supplies in the U.S. start to deplete and Asian demand recovers.

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What is happening with natural gas?

Technological advances in drilling techniques have unlocked vast quantities of natural gas in North America. This increased supply is expected to persist for years to come, limiting the price producers will receive for their gas. As a result, many gas fields in North America will be economically marginal going forward.

How has this affected Medicine Hat?

The City’s gas fields are expected to return very little profit over the next few years. This means that it will be very difficult to cover NGPR’s operating costs and provide surplus revenue to the City of Medicine Hat. Profitable new fields need to be found to replace the produced reserves and historic gas and oil fields that continue to deplete.

Will my utility bills or taxes be affected?

Indirectly, yes. The price charged for natural gas by the City will likely remain low due to the gas surplus. However, the loss of surplus NGPR revenue will continue to result in a significant funding shortfall for the City. Until additional revenue is generated again, this shortfall will need to be made up by either service adjustments or increased taxes or a combination of both.

Did the City see this coming and plan ahead?

Fortunately the City set aside some of the profits from NGPR in profitable years. These funds are now available for NGPR to invest on the City’s behalf. Land acquisition and drilling costs are also at historic lows due to the current depressed commodity pricing. This means that these invested funds will result in a lot more opportunity for the City at this time.

What are the forecasts?

A successful long-term Growth Strategy has the potential to generate over $350 million of direct economic activity in the general area of the City of Medicine Hat over the next three years. Daily production levels of gas and oil are expected to double and remain high for years to come. The NGPR team expects to be able to provide additional revenue back to the City of Medicine Hat as early as 2018 – that we anticipate will continue for many years.

What is the City’s plan?

NGPR will look for oil and gas in the rocks beneath the historic producing gas fields and in areas of southeastern Alberta and western Saskatchewan that have not been fully explored.

Where does renewable energy fit in?

NGPR will continue to focus on non-renewables however the City of Medicine Hat has been and will continue to be a leader in urban renewable energy efforts . The City uses and promotes both forms of energy, and is committed to learning more about potential use of renewable energy for the future.

How are we keeping our leaders informed?

Like all City departments, NGPR provides regular updates to the administration of the City of Medicine Hat. All significant proposed investment opportunities from NGPR are approved through the two-year budgeting cycle or by special approval through the various City of Medicine Hat administrative committees and by City Council when required.

How can I stay updated?

Regular updates will be provided through the City website and notable events will be communicated through news releases and public notices. You can sign up for E-Notifications to receive notices to your email when news about NGPR and other City news is posted.