Alberta regulator projects 17 per cent growth in oilsands production by 2033

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CALGARY — The regulatory body responsible for overseeing Alberta’s oil and gas sector has released a new report that projects oil sands production in the province will grow more than 17 per cent by 2033.

In the latest version of its annual forecast, released Monday, the Alberta Energy Regulator expects production of crude bitumen — the thick, viscous oil found in Alberta’s oil sands region — to grow to four million barrels per day in 2033, up from 3.4 million barrels. daily that was produced in the last year.

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Most of the growth is expected to come not from oil sands mines, but from on-site processes, which use steam to break up oil deep below the Earth’s surface.

The report paints a picture of a future in which the oil sands remain the number one driver of Alberta’s energy sector, despite what the AER says are increasing growth opportunities for alternative forms of energy such as hydrogen, geothermal, helium and lithium.

“In our view, traditional forms of energy – I’m talking about oil, gas and bitumen – should persist and will be part of the energy mix during the energy transition,” Afshin Honarvar, chief economist at AER, said in a live webcast. Discuss the report.

In 2023, petroleum bitumen accounted for 66 per cent of Canada’s total oil equivalent production, according to AER figures.

But the sector is under increasing scrutiny due to emissions-intensive production methods. The oil and gas sector is already the highest emitting industry in Canada, and the rise in oil sands production over the past decade means that total emissions from this sector are increasing – at a time when many other sectors of the economy have succeeded in reducing overall emissions.

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The federal government has proposed capping oil and gas emissions in order to help slow climate change. The rules require the industry to reduce greenhouse gas emissions by 35 to 38 percent from 2019 levels by 2030.

Alberta’s official position is that an emissions cap would be closer to the production cap, restricting growth and investment in the province’s energy sector.

But the Energy Regulatory Authority believes the oil sands could grow while reducing their emissions if they deploy carbon capture and storage technology.

A consortium of oil sands companies, called Pathways Alliance, has expressed interest in building a massive carbon capture and storage network in northern Alberta to reduce emissions from oil sands production sites, but has not made a final investment decision.

“When it comes to carbon capture, utilization and storage, we believe it is a very practical and feasible technology that the industry can use to achieve its operational goals, as well as achieving its zero carbon neutrality goals,” Honarvar said.

A recent report from Deloitte took the opposite tack, concluding that oil sands companies forced to cut emissions in the face of federal caps would choose to cut production rather than invest in expensive carbon capture and storage technology.

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AER also expects global oil prices to continue to rise, from a projected average of US$76 per barrel for US WTI for the current year to US$83.63 by 2033.

Many forecasters have different views on the long-term outlook for oil and oil prices.

The International Energy Agency expects demand for oil to continue to grow until 2030, but noted that increased global production will lead to an abundance of supply before the end of the decade, which could negatively affect oil prices.

Goldman Sachs said it believes oil demand will not peak until 2034, and even then will “stabilize” for a number of years rather than decline sharply.

The Canadian Energy Regulatory Commission has laid out various scenarios in which future oil demand will vary significantly, depending on whether Canada and the rest of the world meet their climate commitments.

This report by The Canadian Press was first published June 24, 2024.

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