Sign Up for FREE Daily Energy News
 
BREAKING NEWS:
Copper Tip Energy Services
Hazloc Heaters
WEC - Western Engineered Containment
Hazloc Heaters
WEC - Western Engineered Containment
Copper Tip Energy

Canadian Oil & Natural Gas Production Set to Soar Through 2040


 

 

 

 

 

Canada’s oil and natural gas production is projected to have steady growth through 2040 as key pipeline and export infrastructure are completed and prices rise over the long-term, according to the Canada Energy Regulator’s first long-term energy outlook.

Specifically, the CER report finds that crude oil production is expected to grow by nearly 50 percent to around seven million barrels per day and natural gas production is set to increase by over 30 percent to over 20 billion feet per day. These increases are expected despite slow growth in Canadian energy demand as new technologies allow for increased energy efficiency.

Key Oil and Natural Gas Export Infrastructure Set to Come Online

Completion of key export infrastructure will allow Canadian energy producers to increasingly tap into other markets as Canadian demand for energy slowly increases by less than 5 percent between 2018 and 2040. For instance, Enbridge Line 3, Keystone XL, and the TransMountain Pipeline Expansion are all expected to come online in the early 2020s.

 

Enbridge Line 3 and Keystone XL will allow for the efficient transport of Canadian oil into the United States and the TransMountain expansion will more than double the amount of oil that can be transported from Alberta to the coast in British Columbia.

These pipelines will ease the significant infrastructure constraints which led to a glut of oil in Alberta and very low prices as Canadian producers were unable to export their oil. In response to the extremely low price environment, the Albertan government made the controversial decision to enact a curtailment policy in December 2018 to limit oil production in the province, a policy that was recently extended through 2020 due to pipeline delays.

Large liquified natural gas (LNG) projects are also set to come online during this time period in British Columbia. The report mentions the LNG Canada project, which made a final investment decision to build a facility in Kitimat, B.C. in late 2018. The CER also recently approved an application to expand another LNG gas export facility Kitimat. The approval increased the license to export natural gas from 20 to 40 years and will increase LNG exports from 10 million tonnes to 18 million tonnes.

The following chart shows the significant increase in Canada’s LNG export capacity from zero to 3.7 billion cubic feet per day in 2040.

LNG Export Facilities and Electricity Demand to Boost Canadian Natural Gas

The new LNG export facilities in British Columbia will also boost production on the nearby Montney Shale formation in the northeastern part of the province. This will enable British Columbia to make up a larger share of natural gas production than Alberta – currently the source of two-thirds of the country’s natural gas – by 2040. The use of hydraulic fracturing along with horizontal drilling is allowing for the economic production of British Columbia’s natural gas, like in the United States.

Natural gas is also expected make up a larger share of Canada’s energy mix from 35 percent in 2017 to 40 percent in 2040.

Oil and Natural Gas Growth Consistent with Low Carbon Future

The report also notes that Canada is making progress in transitioning towards a low carbon future. Greater use of clean burning natural gas – along with increased energy efficiency and increased power generation from renewables – will allow Canada to lower emissions..

Importantly, the export of Canadian LNG also has significant potential to help lower global greenhouse gas emissions. According to LNG Canada, the export of LNG from its facility will significantly reduce global emissions.

 

Conclusion

CER’s recent report is welcome news for Canadian energy producers, who have suffered from a lack of pipeline and export infrastructure to get their oil and natural gas to international markets. Timely completion of the planned infrastructure will allow Canadian energy producers to significantly increase production, all while lowering overall greenhouse gas emissions – a win-win for the economy and the environment.



Share This:



More News Articles


New SHOWCASE Directory Companies

 

Caliper Inspection
Challenger Geomatics
CDN Controls
DyCat Solutions
Canline Pipeline Solutions
Gemini Fabrication
Environmental Mats