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    Alberta Regulator Sees Gas Production Decline

Summary

But demand to rise sharply as power generators move away from coal

by: Dale Lunan

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Alberta Regulator Sees Gas Production Decline

The Alberta Energy Regulator (AER), in its latest energy outlook released June 8, is forecasting a 3.8% decline in the province’s marketable natural gas production by 2029 as output from new wells is not expected to keep pace with declines from maturing basins.

Marketable production averaged 288.1mn m3/day (10.2bn ft3/day) in 2019, a decline of 4% from 2018, and is expected to average 277.7mn m3/day this year before slipping to 277.5mn m3/day in 2021, rising slightly in the following two years but then falling again, to 277.1mn m3/day by 2029, the AER said.

“Total production of marketable natural gas is projected to increase from 2022 to 2024 and gradually decline by the end of the forecast period as production from new wells does not offset the declines in existing production,” the outlook says. “The production increase during this time is expected to be supported by higher consumption and greater market access.”

While the AER is forecasting a decline in Alberta gas production over the next decade, demand for natural gas is expected to head in the other direction, growing 2.5% annually and by 28% overall by 2029, compared to 2019.

Total in-province demand will increase to about 220mn m3/day by 2029 from about 172mn m3/day in 2019, led by the power generating and oil sands sectors.

Demand from power generators will increase 58% over the forecast period, to 52mn m3/day from 33mn m3/day, as utilities retire coal-fired plants in favour of gas-powered generating units. Demand from the oil sands sector will increase by about 41%, to 75mn m3/day from 53mn m3/day.

Finally, removals (or exports) of gas from Alberta are projected to fall throughout the forecast period, to 57mn m3/day in 2029 from 80mn m3/day in 2019. The drop is expected because of declining Alberta production toward the end of the outlook and increased demand from the oil sands, petrochemical, and electricity generation sectors.