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    Canada’s Regulator Sees Gas Growing Through 2040


LNG exports will drive 30% increase in natural gas production.

by: Dale Lunan

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Canada’s Regulator Sees Gas Growing Through 2040

Canadian natural gas production will increase by more than 30% over the next two decades, the Canada Energy Regulator (CER) says in its latest supply and demand forecast, released December 3.

In the near term, weak commodity prices will lead to reduced drilling investment and production from new wells won’t be able to keep pace with natural declines from existing wells. But as Canada’s LNG industry emerges onto the world stage in the middle of the next decade, exploration and development spending to support those exports will resume, and production will reach 21bn ft3/day in 2040 – driven by 3.7bn ft3/day of natural gas exported as LNG – from 16bn ft3/day in 2017.

On the consumption side, the share of natural gas in Canada’s energy mix increases to 40% – about 5,645 PJ – in 2040 from 35%, or 4,670 PJ in 2018. Much of that increase comes in Alberta, Saskatchewan and Manitoba, where gas and renewables displace coal in power generation. By 2040, coal will account for just 1% of Canada’s primary energy consumption, down from 5% in 2017.

Although gas demand will grow, the CER projects that total fossil fuel use will grow by less than 1% between now and 2040, with gas use up 18% but refined products consumption falling 7% and coal use plunging by nearly 75%. The changing mix of energy, the CER says, contributes to a 7% reduction in greenhouse gas (GHG) emissions intensity by 2040, with even better intensity reductions possible.

“Accounting for reductions in non-combustion emissions, such as reducing methane leaks (a 45% reduction in methane emissions by 2025 has been targeted), as well as including emission credits purchased through international trading mechanisms (like Quebec’s emission trading with California) could further decrease emission intensity,” the CER forecast says.