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Canada’s oil exports could triple; gas in doubt Study: Focus on oil sands; gas resource ‘major uncertainty’ Gary Park Petroleum News Calgary Correspondent
Relying heavily on Alberta’s oil sands, Canada’s oil shipments to the United States could double and possibly triple by 2025, but its natural gas resource base is a “major uncertainty,” especially frontier regions and unconventional resources, the National Energy Board reported July 3. The 98-page study, covering scenarios for supply and demand over the next 22 years, said the Western Canada Sedimentary Basin — the mainstay of Canada’s fossil-fuel wealth for more than 50 years — can no longer be counted on to retain that role.
The federal regulator said signs that the basin is maturing as a gas play make it “necessary to develop unconventional and frontier sources to maintain or potentially increase Canadian production.
“However, since there has been little development of unconventional gas or frontier gas to date, there is considerable uncertainty about future potential production.” Gas deliverability will peak in 2010 Under the National Energy Board’s most conservative scenario, gas deliverability will peak at about 18 billion cubic feet per day in 2010, barely ahead of output in 2001, then start a gradual decline. Applying a more technology-intensive model, the study says deliverability could reach 19 bcf per day in 2015, then start to shrink.
The federal regulator expects the price of natural gas to rise to at least 90 percent of crude oil values and suggested it could reach parity by 2010.
It predicted gas prices will continue to be volatile, resulting in demand-side adjustments as industrial users are forced to relocate or switch to other fuels.
Over the next seven years, the National Energy Board expects Canada’s coalbed methane drilling to climb from 300 wells this year to 3,000-3,500 wells in 2010 and projects coalbed methane output could contribute 2.5 bcf per day by 2025. Oil sands will produce surge in exports There is less doubt surrounding Canada’s oil outlook, with the study projecting growth from the “enormous reserves” of oil sands in Alberta that will translate into a corresponding surge in exports to the United States.
It said an assumed price of US$22 per barrel “provides adequate returns to support investment in the oil sands and offshore oil development.”
But the National Energy Board did not factor in the cost impact of the Kyoto Protocol, saying there is insufficient information on which to build projections.
It also predicted that oil sands output will grow regardless of a likely shortage of condensate for diluting bitumen to aid pipeline transportation over the next three years, coupled with the supply and price of natural gas used in the extraction and processing of bitumen.
The National Energy Board said the condensate shortfall will require the use of non-traditional diluents such as light synthetic crude and naphtha, which would add to production costs. Alternatives to natural gas include the possible gasification of bitumen, the use of “clean” coal or the possible use of nuclear energy, an option that is currently being evaluated.
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