The rapid growth of Canada’s oil sands is expected to dramatically increase its consumption of natural gas over the coming decade, a prospect that stands to help Alberta’s gas industry but raise the country’s emissions.
A new estimate by Ziff predicts oil sands gas consumption will rise to 3 Bcf/d, up from 1.1 Bcf/d. The rise will be propelled by a major expansion of oil sands production, which is expected to at least double its output between now and 2020 amid an investment deluge.
The increase in gas consumption would take a substantial percentage of Alberta’s output. Last year, the province produced 11 Bcf/d; if that remains constant, the oil sands would consume nearly 30% of the total in a decade, up from 10%. Ziff calculates each additional billion cubic feet of daily demand will drive up gas prices by 25 cents per 1,000 cubic feet – or 50 cents for the 2 Bcf increase in oil sands demand.
“Gas demand for the oil sands sector will account for 4% of the total North America gas demand in 2020,” said Julia Sagidova, Gas Analyst at Ziff Energy.