When I visited Calgary last fall, the signs of a dramatic decline in Alberta's new natural-gas activity were strongly in evidence. Now that full-year statistics are being published, it's clear that operators throughout Canada were buffeted by the same forces. 2007 was a brutal year for Canadian gas drillers. High costs and not-so-high commodity prices, coupled with changes in Alberta's fiscal policies toward the oil and gas industry, and the strength of Canada's dollar, combined to send well permits off a steep cliff. Last year, just 12,740 licenses for gas wells were issued in Canada, a 5,530-well plummet from 2006 permits. Conventional oil and bitumen drilling also fell in 2007, but the decline was less severe. A total of 6,486 permits were issued for oil-prone targets, a 10% drop from the prior year. Alberta, British Columbia, Saskatchewan and Manitoba all experienced substantial losses in permits filed. The only increases were in regions with extremely light activity anyway: Northwest Territories, New Brunswick and Prince Edward Island. --by Peggy Williams, Senior Exploration Editor, Oil and Gas Investor. Contact me at pwilliams@hartenergy.com