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Voracious fuel consumption by Alberta oilsands production complexes has made them a potent force in pricing natural gas, according to the National Energy Board (NEB).
The giant forest fire nicknamed The Beast that last May forced the evacuation of the northern industry capital of Fort McMurray gutted the Alberta gas price to C$0.58/gigajoule (GJ) (US$0.46/MMBtu) by shutting the bitumen plants, NEB records show.
The market jumped back to C$2.27/GJ (US$1.79/MMBtu) by early summer as the blaze petered out and production resumed at oilsands sites, which were not damaged but closed to let staff take care of their fleeing families.
The Alberta price upheaval had little effect on nationally or internationally traded gas across Canada and the United States. Gas producers and dealers largely sat out the disruption rather than worsen a temporary setback by flooding long-distance pipelines.
Oilsands gas demand averaged 2.4 Bcf/d last year, or about one-quarter of total Canadian consumption, NEB said. But the full size of the bitumen belt gas appetite, as measured by the Alberta Energy Regulator (AER), was even bigger.
NEB only counts purchased gas. AER calculates 2016 consumption as 2.9 Bcf/d by also counting byproduct gas of oilsands operations, which the plants immediately consume and do not put on the market.
The latest edition of AER’s annual “state of the industry” reserves report projects that gas use by oilsands complexes, including built-in heat and power cogeneration stations, will grow by 62% to 4.7 Bcf/d as of the mid-2020s.
Barring technology breakthroughs to cut gas use sharply, the Canadian Energy Research Institute (CERI) predicts that the industry will run into a provincially legislated cap on annual oilsands carbon emissions at 100 million tons within nine to 11 years.
Gas-fired thermal extraction complexes currently chalk up annual greenhouse gas emissions of 70 million tons to produce 2.5 million bbl of oil per day. The cap stops output using current methods at about 3.8 million b/d.
Gas burned per barrel of oilsands output ranges from 0.33 GJ (0.31 MMBtu) for a mine digging out non-upgraded bitumen to 2.58 GJ (2.45 MMBtu) for an integrated plant using in-situ underground steam extraction and a synthetic crude upgrader, CERI calculates.
The lowest-cost, fastest-growing method -- SAGD, short for steam-assisted gravity drainage with horizontal well pairs for simultaneous heat injection and production flows -- averages gas use of 1.18 GJ (1.12 MMBtu) per barrel of non-upgraded bitumen.
Carbon-dioxide exhaust per barrel of oilsands production ranges from 45 kilograms (99 pounds) at open-pit mines to 67 kilograms (147 pounds) at underground extraction plants.
Numerous cleanup innovations are under study, such as using microwave energy or soap-like solvents to replace thermal extraction with gas-fired steam. Industry analysts report little is known yet about the potential for large-scale performance by new techniques, which remain in early and confidential experimental or pilot plant stages.
Oilsands gas use and emissions cuts of 25% are forecast for the first new method that has been incorporated into a big project: SA-SAGD -- short for solvent-assisted steam-assisted gravity drainage -- in a C$7 billion (US$5.3 billion) Imperial Oil plan currently under regulatory review for a 135,000 b/d complex near Fort McMurray.
When built, Aspen would stand out as a departure from a well-established pattern of rising industrial fuel consumption. Alberta oilsands purchased gas use has more than tripled from a 2005 average of 0.7 Bcf/d -- far outpacing the 34% growth over the same period in total Canadian consumption to 8.3 Bcf/d from 6.2 Bcf/d, NEB said.