Fact Sheet - Canada’s Energy Future 2013: Energy Supply and Demand Projections to 2035 - Natural Gas Outlook Highlights

Fact Sheet - Canada’s Energy Future 2013: Energy Supply and Demand Projections to 2035 - Natural Gas Outlook Highlights

Canada's Energy Future 2013: Energy Supply and Demand Projections to 2035 projects Canada's "most likely" energy future to the year 2035. It includes a Reference Case, with baseline projections based on the current macroeconomic outlook, a moderate view of energy prices, and government policies and programs that were law or near-law at the time the report was prepared. The highlights below are based on the Reference Case. For detailed information, please see Chapter 6 of the full report.

Natural gas production increases 25 per cent, led by higher levels of tight and shale gas development.

In a matter of a few years, the landscape for natural gas in North America changed dramatically, switching from a tight supply and demand balance to a market in which natural gas supplies are considerably more abundant at lower costs. This reversal can be largely attributed to technological advancements in natural gas drilling and well completion methods. In particular, a combination of extended reach horizontal drilling, multi-stage hydraulic fracturing and pad drilling have allowed producers to recover gas from areas that were previously thought to be technically impossible or not profitable.

Drilling

  • The number of natural gas wells drilled annually in Canada has been in decline since 2005, with a steep decline since 2008, largely due to significantly lower gas prices. Drilling activity in the last few years has focused on the most economic resources - deeper tight and shale gas resources - with higher production rates per well.
  • The number of gas wells drilled annually increases over time, driven by increased capital expenditures as natural gas prices rise. Drilling continues to focus on the more economic deeper tight and shale resources. The number of gas wells, however, will not reach the highs of the 2005 to 2008 period, but the strong production rates from deep wells eventually lead to a production increase in Canada as additions of new gas outpace the production declines from older wells starting in 2019.

Production

  • In Canada, shale and tight gas production have partially offset declining conventional production, although total Canadian gas production has continually declined since 2006. In the projection, natural gas prices increase gradually and shale and tight gas contribute the vast majority of production growth in Canada. Production from the Montney tight gas area in Alberta and British Columbia and the Horn
  • River shale gas area in Northeast B.C. help to reverse production declines and total Canadian production begins to increase by 2019.
  • Canadian marketable natural gas production declines from 373.1 106m³/d (13.2 Bcf/d) in 2013 to 318.2 106m³/d (11.2 Bcf/d) in 2018. As rising prices and LNG exports support higher drilling levels, production ramps up continuously from 2019 onwards, reaching 494.0 106m³/d (17.4 Bcf/d) in 2035.

Natural Gas Production by Type, Reference Case

Natural Gas Production by Type, Reference Case

Liquefied Natural Gas (LNG) Assumption

  • This analysis assumes 28.3 106m³/d (1.0 Bcf/d) of LNG exports in 2019, which grows to 56.6 106m³/d (2.0 Bcf/d) in 2021 and 85.0 10³m³/d (3.0 Bcf/d) in 2023. This is an assumption rather than a projection, and is included to account for the effects of LNG on other parts of the energy system, such as demand and natural gas production. Exploration and development spending associated with LNG exports boost capital expenditures above what they would otherwise be. This leads to more natural gas wells and production in the Western Canada Sedimentary Basin.

 

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