Production expected to greatly exceed needs, adding export pressure
CALGARY — Energy exports from Canada will have to rise as the country produces 75 per cent more oil and 25 per cent more natural gas by 2035, far outstripping its needs, says the National Energy Board.
In projections that largely echo its 2011 energy future report and other recent forecasts, the NEB says Canadian production of crude oil is expected to rise from about 3.2 million barrels per day in 2012 to 5.8 billion by 2035.
Meanwhile, natural gas production will decline by 2018 to 11.2 billion cubic feet per day from 13.2 Bcf/d this year due to poor prices, then rise to 17.4 Bcf/d by 2035 thanks to rising demand and prices due in part to exports of liquefied natural gas.
The 2011 report predicted 6.0 million bpd of oil and 18.0 Bcf of gas production by 2035.
“Today’s report complements the International Energy Agency’s recently released World Energy Outlook 2013, which found that global demand for oil will continue to grow, reaching 101 million barrels per day by 2035,” said federal Natural Resources Minister Joe Oliver in a statement.
“As the growth of energy production outpaces domestic energy use, more energy will be available for export. Our government will continue to work hard to seize this opportunity by opening new markets for our natural resources.”
Canadian oil export capacity growth has been slowed by delays in winning approval for the Keystone XL pipeline into the United States and potentially by opposition in Canada to pipelines through B.C. and into Eastern Canada.
The NEB forecasts oilsands output will rise to 5.0 million bpd by 2035, more than double 2012 production, and with most of the growth in thermal oilsands.
It points out its forecast matches those by the Canadian Association of Petroleum Producers and the Canadian Energy Research Institute until 2021 but is about 15 per cent lighter (about 700,000 bpd) by 2030 than both.
It noted that if all proposed oilsands projects go ahead, production could hit 8.3 million bpd but it bases its lower number on a “reasonable rate of growth” considering historical patterns, economic returns and capital costs.
The NEB said Canadian energy needs will increase by 28 per cent by 2035, a slower than historical rate, due to energy efficiency improvements and a reversal of transportation energy demand growth.