Oilsands

After two years of weaning off triple-digit prices by emphasizing cost control, Alberta bitumen output is on the rise, increasing Canadian natural gas consumption as well as sustaining strong oil exports.

The Liberal government in Ottawa opened doors Tuesday to growth by Canada’s biggest natural gas consumers, Alberta oilsands plants, by approving 970,000 b/d of capacity additions for export pipelines to the United States and overseas.

Continued reliance on natural gas for thermal bitumen extraction will severely stunt the currently expected growth of Alberta oilsands production, the industry has been warned.

Canada’s biggest natural gas consumer — Alberta thermal oilsands production — will grow by 54% over the next 15 years, according to an industry survey.

U.S. tight oil and Canada’s oilsands have become the “twin pillars” of the continent’s energy security, accounting for almost 95% of North American production growth from 2009 to 2015, while at the same time reducing overseas oil imports by 40%, IHS said Monday.

Northern natural gas and thermal oilsands production will be able to grow in step as a result of approval granted Thursday for a C$1.29 billion (US$993 million) set of pipeline additions in Alberta and British Columbia.

The sales outlook for natural gas in Canada’s chief producing province brightened Sunday when the Alberta government unveiled a new carbon emissions-reduction policy hitting coal-burning power plants and using a light hand on gas-burning oilsands production.

Poor prices are breathing life into plans to slow down the growth rate of natural gas use by northern Alberta thermal oilsands plants, the biggest Canadian industrial fuel consumer and source of carbon emissions.

Western Canada's onshore plays yield comparable results to key liquids-heavy producing regions in the Lower 48 states, a positive sign once prices strengthen and demand for oilsands diluent grows, Wood Mackenzie Ltd. is estimating.