Faith in the potential for North American natural gas to ease the continent's environmental and energy security concerns received a boost yesterday from two reports: one showing an enormous jump in the amount of gas in the United States; and another showing companies are still willing to ante up for the right to explore in Canada.

Shale rock, geological formations that have received much attention as drillers perfect new techniques to unlock the fossil fuel trapped inside, is once again propelling the natural gas industry's confidence skyward.

The Potential Gas Committee, a U.S. outfit that tallies natural gas resources south of the border based on statistical information originating from explorers and producers, yesterday jacked up its resource estimate by 35%. The increase is largely due to new shale plays such as the Marcellus play in New York and Pennsylvania, Fayetteville in Arkansas, and Haynesville in Louisiana.

"It is an affirmation of the unconventional story in North America with respect to gas," said Alan Boras, a spokesman for EnCana Corp., Canada's largest natural gas producer. "The same general trend is very evident in Canada with respect to [the] Montney [and] Horn River [shale plays], and other opportunities that are emerging."

EnCana shares closed on Thursday up 88 cents at $57.88.

The United States leads Canada when it comes to developing unconventional natural gas plays, largely because America's conventional resources started to decline before those north of the border and it was forced to find new pools of hydrocarbons. As a result, some industry players, while still optimistic Canada's shale plays will reach commercialization, are hesitant about extending the results of the Potential Gas Committee's report to domestic reserves.

"At this stage in Canada, we do not expect to see such an increase in natural gas reserves as a result of shale plays," said Phoebe Buckland, a spokeswoman for Talisman Energy Inc., which is drilling in Montney and evaluating its prospects in Quebec's lowlands. "We expect to see these plays ramp up over the next few years."

British Columbia's Ministry of Energy, Mines and Petroleum Resources, yesterday announced results from its June land rights auction, its ninth-most-lucrative sale in its history. It sold eight drilling licences in the Horn River basin for more than $173-million. Imperial Oil Ltd. and its parent company, Exxon Mobil Corp., snapped up 113,000 acres in the Horn River region, said Pius Rolheiser, an Imperial spokesman.

"We certainly continue to view the Horn River basin as a very promising area, with what we believe has potential for significant resource addition and production volume," he said.

Some argue North America's abundance of natural gas means prices will remain depressed and production will therefore be stifled. But EnCana's Mr. Boras argues the abundance, now backed up by hard U.S. data, will give governments and other industries the necessary comfort to shift away from electricity plants powered by coal and cars powered by gasoline and turn to natural gas.

"Because it is plentiful, it now brings the assurance the supply will be there, that we can invest the money in infrastructure to be able to use this resource to fuel our economy."

ctait@nationalpost.com