Oil sands output to rise Click here to go to the full PDF version of this issue, with any maps, photos or other artwork that appears in some of the articles. 250 percent increase in Canadian sands production by 2035, IEA says Gary Park For Petroleum News The next 23 years will see Canadian oil production rise steadily as oil sands volumes grow by 250 percent to 4.3 million barrels per day, more than enough to offset shrinkage in conventional output, the International Energy Agency predicts. If the projection is accurate, based on assumptions that environmental opposition will be overcome and more crude will be delivered to the United States and Asia, Canada’s oil production will grow to 6.3 million bpd by 2035. But the report emphasizes that “extraordinary growth” in oil and natural gas production in the U.S. will mean a global sea change, with the U.S. becoming a net exporter of gas and almost self-sufficient in net energy terms over the forecast period. From Canada’s standpoint, the IEA said the outlook has become clouded by U.S. delays in approving TransCanada’s Keystone XL pipeline to deliver Alberta oil sands crude and Bakken light/tight oil to the Texas Gulf Coast and by opposition to delivering oil to the British Columbia coast for export to Asia. Without new export capacity, the IEA said Western Canadian oil production will exceed regional consumption and current export capacity before 2016, largely because the rise in light/tight oil volumes in the U.S. has “been nothing short of spectacular,” with the Bakken at 600,000 bpd by mid-2012 and the Eagle Ford achieving 300,000 bpd at the same time. The report noted that Canada has joined that race, reaching 190,000 bpd in 2011 from the Canadian sector of the Bakken and from other emerging plays and is projected to reach more than 500,000 bpd by 2035, with natural gas liquids from shale plays increasing significantly, offsetting falling production from conventional gas plays. Water needed The IEA estimates that oil sands mining and upgrading requires 0.9 cubic meters of water per barrel of synthetic crude produced, while in-situ recovery need 0.2 cubic meters per barrel produced. The bulk of that water for oil sands mining operations is drawn from the Athabasca River, the major waterway in northeastern Alberta, which contributed 85 percent in 2010, up from about 66 percent in 2009. However, in-situ operations sources just over 80 percent of their water needs from groundwater (such as deep saline aquifers) in 2010, making no withdrawals from the Athabasca River. Currently about half the water withdrawn by in-situ operations is fresh water, although projects are increasingly turning to water from saline aquifers. Based on anticipated production trends, the IEA estimates total water withdrawals in the oil sands will grow to 520 million cubic meters in 2035 from 220 million cubic meters in 2010. The IEA said that given increasing reliance on saline aquifers or waste water, water availability does not pose an immediate risk to operations. The report projected that North American exports of LNG (including projects in Western Canada) would reach 35 billion cubic meters by 2020 and top 40 billion cubic meters in 2035, with two-thirds destined for Asia. It forecast that Canadian gas production will climb rapidly through the outlook period, reaching about 190 billion cubic meters in 2035, with higher shale gas and coalbed methane output offsetting a decline in conventional supply. Print this story | Email it to an associate.

US seen overtaking Saudis as biggest oil producer The United States will become the world’s largest oil producer by around 2020, temporarily overtaking Saudi Arabia, as new exploration technologies help find more resources, the International Energy Agency forecast Nov. 12. In its World Energy Outlook, the energy watchdog also predicted that greater oil and natural gas production — thanks partly to a boom in shale gas output — as well as more efficient use of energy will allow the U.S., which now imports some 20 percent of its energy needs, to become nearly self-sufficient around 2035. That is “a dramatic reversal of the trend seen in most other energy-importing countries,” the Paris-based IEA said in its report. “Energy developments in the United States are profound and their effect will be felt well beyond North America — and the energy sector.” Rebounding U.S. oil and gas production is “steadily changing the role of North America in global energy trade,” the IEA said. Mideast oil to Asia For example, oil exports out of the Mideast will increasingly go to Asia as the U.S. becomes more self-sufficient. That will increase the global focus on the security of strategic routes that bring Middle East oil to Asian markets. Tensions between Iran and Western powers have raised concerns that oil exports from the Persian Gulf could be blocked in a potential conflict over Tehran’s alleged plan to develop nuclear weapons. The IEA added that global trends in the energy markets will be influenced by some countries’ retreat from nuclear power, the fast spread of wind and solar technologies and a rise in unconventional gas production. The agency concluded that despite the rising use of low carbon energy sources, huge subsidies will keep fossil fuels “dominant in the global energy mix.” “Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path,” the IEA said. Global energy needs are forecast to increase by a third by 2035, with 60 percent of the additional demand coming from China, India and the Middle East. —PABLO GORONDI, Associated Press