It is a long way from Tripoli to Fort St. John, but the 'Arab spring" that is apparently transforming oil-rich Middle East countries is having an impact on real estate in this northeast B.C. town of 18,000 and other centres close to the largest gas fields in North America. Threatened by a potential oil shortage – war-torn Libya is not expected to have its oil flow back on line for at least a year and other Mid-East sources also face challenges - the U.S. and China are increasingly turn to northeast B.C. and the Alberta oilsands for assured supplies to fuel the world's largest economic engines.
Northeastern B.C. contains four major gas formations: the Montney basin near Dawson Creek, and the Horn River, Liard basins, and Cordova embankment, all close to Fort Nelson.
The B.C. energy minister estimates the fields could contain up to 1,000 trillion cubic feet of gas deposits. Even at today's low values of around $4 per 1,000 cubic feet at the well head, the value is astronomical. A Minister of Energy report last month pegged direct industry investment in the gas sector at $6.3 billion in 2010-11. About 25 per cent of investment in the province's gas fields now originate in Asia, the ministry noted. In February, gas giant Encana inked a $5.5 billion agreement with PetroChina for 50 per cent of the Calgary's company Cutback Ridge assets in northeast B.C. and Alberta, as an example.
In Fort St. John, the major service centre in the northeast gas zone, the apartment rental vacancy rate has fallen 50 per cent in the past year, to 10.5 per cent, according to Canada Mortgage and Housing Corporation, but local realtors say it is now actually closer to 5 per cent due to an influx of gas-field workers, consultants and managers. "The exploration work is turning into boots on the ground," said one realtor. The Petroleum Association of Canada expects 700 gas drills to be working the fields this year, a 7 per cent increase from 2010.
The average price of a house in Fort St. John is now $315,000, the highest in the northeast, noted Curtis Robinson, a Fort St. John realtor and a director with the B.C. Northern Real Estate Board.
In Dawson Creek, population about 11,000, the apartment rental vacancy rate has fallen to 1.5 per cent and the average two-bedroom apartment rents for $936, the third highest in B.C., behind only Vancouver and Victoria. The town also has the highest average income and the lowest unemployment rate in B.C., according to Mayor Mike Bernier. Fort Nelson, with a population of 5,000 and the largest gas processing plant in Canada, and is also facing a housing shortage, city officials say.
