Natural gas use by thermal oilsands plants could grow almost as fast as their bitumen production over the next 10 years, the Alberta Energy Regulator (AER) predicted.

Gas burned to heat steam for in-situ underground oil separation is forecast to increase by 37% to 4.8 Bcf/d in 2028 from 3.5 Bcf/d in 2018, according to the AER’s latest annual reserves review. The projected gas consumption increase nearly matches forecasted Alberta bitumen extraction, which is projected to grow 40% from 3 million b/d in 2018 to 4.2 million b/d in 2028.

The big gas appetite results from an entrenched trend in operating methods.

Production by the industry’s original cornerstones -- iconic sprawling mines prowled by mammoth trucks -- is only expected to grow by 300,000 b/d or 20% to 1.8 million b/d over the next 10 years.

The in-situ technique, which uses gas-fired boilers and pairs or triplets of parallel steam injection and oil extraction wells, is forecast to generate output growth of 800,000 b/d or 50% to 2.4 million b/d by 2028.

Oilsands mines, only using heated water for an above-ground step in the separation process, burn 0.4-0.6 Mcf/bbl of production. In-situ plants consume 1.0-2.0 Mcf/bbl, according to the AER.

In-situ complexes are favored by reduced oil prices. In the base outlook that the AER rates as the most likely scenario, the annual average oil price only rises slowly to $81/bbl in 2028. Quality discounts continue to hold gummy bitumen below the benchmark for high-grade light oil.

“Going forward, capital expenditures in Alberta are anticipated to focus on developments with lower costs and shorter investment cycles,” the AER said.

“Oilsands capital expenditures continued to decrease from an estimated C$13.8 billion [$10.4 billion] in 2017 to an estimated C$13.4 billion [$10 billion] in 2018, a level of spending not seen since 2005.”

Although stalled pipeline projects are expected to emerge from regulatory ordeals into construction for added Alberta oil deliveries, prices and industry conditions are forecast to continue to limit investment.

Over the next decade, “capital expenditures in the oilsands are projected to be primarily focused on sustaining capital, debottlenecking and expanding existing projects,” AER said.

In an annual forecast released on Thursday, the Canadian Association of Petroleum Producers (CAPP) echoed the AER’s low investment expectations. However, CAPP blamed environmental resistance and regulatory procedures that encourage industry opponents for the “constrained” outlook.

“This year, capital spending in the oilsands is set to decline for a fifth consecutive year to roughly C$12 billion [$9 billion], approximately one-third of the investment seen in 2014,” CAPP said. “Overall, capital investment across Canada's oil and natural gas industry is forecast to fall to C$37 billion [$27.8 billion] in 2019 compared to C$81 billion [$60.8 billion] in 2014.”

CAPP has cut its annual Canadian oil growth forecast in half since 2014 down to 1.4% per year. The increase is now expected to be 1.27 million b/d to a total 5.86 million b/d in 2035 from all sources including conventional western wells and Newfoundland offshore production.

“We are positioned to be a leading supplier of the most responsibly produced oil and natural gas on the planet, but our lack of pipelines and inefficient regulatory reality means that other suppliers, with lesser environmental and social standards, are taking our market share," said CAPP President Tim McMillan.

CAPP and the governments of fossil fuel-producing provinces, except for British Columbia’s New Democratic Party regime, are fighting Liberal environmental reform legislation that they have nicknamed “the no-pipelines bill.”