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Released December 24, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Canada's crude oil production will decrease by 7% this year because of the COVID-19 pandemic, but fossil fuels would still make up more than 60% of Canada's fuel mix by 2050 under a "Reference Energy Scenario," contained in a recent report by the government's Canada Energy Regulator (CER). However, under the report's "Evolving Energy Scenario," fossil fuel consumption already peaked in 2019 and will be 35% lower by 2050.
According to the agency's "Canada's Energy Future 2020: Energy Supply and Demand Projections to 2050" report, which was unveiled on November 24, Canada's crude oil production will fall by 335,000 barrels per day (BBL/d) this year compared with 2019. Western Canadian producers shut in oil production this year due to low prices, eventually cutting almost 1 million BBL/d of oil supply by mid-May 2020. Production increased in the latter half of 2020, along with rising prices.
Natural gas production was relatively stable in 2020. Prices in western Canada have been higher in 2020 compared with the past several years, according to the report. The high prices sustained Canadian natural gas production through the first half of 2020 at levels similar to 2019.
Industrial Info has tracked more than $4.2 billion in Canadian Oil & Gas Production project completions for 2020. In terms of total investment value, Alberta led the way with more than $1.9 billion, followed by Saskatchewan ($1.2 billion) and British Columbia ($1 billion).
Click on the image at right for a graph showing Canadian 2020 Oil & Gas Production project completions by sector.
One of the big-ticket Oil & Gas Production projects completed this year was Keyera Corporation's (Calgary, Canada) $453 million Pipestone 04-07 Shallow-Cut Sour Gas Processing Plant Addition, Phase I. Completed in mid-October, the 200 million-cubic-foot-per-day processing plant has acid gas injection capabilities, 24,000 BBL/d of condensate processing capacity and associated water disposal facilities, bringing total condensate processing capacity to 38,000 BBL/d. For more information, see Industrial Info's project report.
Industrial Info also is tracking more than $18 billion worth of medium- and high-probability Oil & Gas Production projects in Canada that are planned to kick off construction in 2021. Medium-probability projects are assessed as having a 70-80% likelihood of moving forward as planned, while high-probability projects have an 81-99% likelihood. With more than $13.7 billion in planned activity, Alberta has the lion's share of the kickoffs, followed by Saskatchewan and British Columbia.
Click on the image at right for a graph showing Canada's planned medium- and high-probability Oil & Gas Production project kickoffs by sector.
Among the high-probability projects set for kickoff next year is Keyera's Pipestone Natural Gas Production and Condensate Field 2021 Drilling Program near Wembley, Alberta. The program will use existing well pads and drill 20-26 new wells to a depth of more than 3,500 meters, with a 3,000-meter horizontal leg with multiple individual hydraulic fracturing stages, to further evaluate and develop the field. It is estimated to have a 2022 year-end exit of 38,000 barrels of oil equivalent per day (BOE/d). For more information, see Industrial Info's project report.
Meanwhile, Canada's end-use energy consumption will fall by 6% this year as a result of the pandemic, the biggest drop since at least 1990, according to the CER report. Electricity generation will fall by 3% in 2020, or 19 terawatt hours, driven by lower demand, the report said.
The report includes two scenarios for Canadian energy consumption and production trends over the next 30 years: the "Reference Energy System Scenario" and the "Evolving Energy System Scenario."
The Reference Scenario considers a future where action to reduce greenhouse gas emissions does not develop beyond measures currently in place.
"Globally, this implies stronger demand for fossil fuels, resulting in higher international market prices compared to the Evolving Scenario. Low carbon technologies with existing momentum continue to improve, but at a slower rate than in the Evolving Scenario," the report says.
Fossil fuels would still make up 60% of the nation's energy mix by 2050 under the Reference Scenario, as improvements in energy efficiency offset population growth and increasing industrial output, particularly in Canada's oil sands. This scenario includes "significantly higher" assumed crude oil prices, greater volumes of assumed liquefied natural gas (LNG) exports, moderately higher natural gas prices, and a "lack of additional domestic climate policies beyond those currently in place," which will drive higher crude oil and natural gas production.
In Canada's electricity mix, natural gas would play a larger role by 2050 under the reference scenario, and renewable and nuclear generation remain at 81% of generation.
Industrial Info is tracking more than $65 billion worth of high- and medium-probability power generation projects in Canada. One big-ticket item is Nalcor Energy's (St. John's, Newfoundland and Labrador) $7 billion grassroot, 836-megawatt (MW) Muskrat Falls Hydro Station near Churchill Falls, Newfoundland and Labrador. Final commissioning is underway, with completion expected by third-quarter 2021. The facility consists of a spillway, three dams and a powerhouse, and will be the second-largest hydroelectric facility in the province when complete, according to Nalcor.
Canada's federal government will temporarily waive debt payments owed by Nalcor Energy, a province-owned corporation, "to help ensure that the Lower Churchill projects are financially sustainable," according to a news release issued on December 17 by Canadian Prime Minister Justin Trudeau. The province would have been required to pay C$844 million (US$653 million), C$780 million (US$603 million) of which would have been due by the end of December and added to the provincial debt, at a time when Newfoundland and Labrador is projecting a C$1.84-billion (US$1.42 billion) deficit in its latest budget, according to local news accounts. For more information, see Industrial Info's project report .
Evolving Scenario
The Evolving Scenario assumes "a hypothetical suite of future domestic policy developments that build upon current climate and energy policies," the report says. Total renewable and nuclear demand across the energy system would increase by 31% by 2050. Ninety percent of Canada's electricity generation would come from renewable and nuclear generation, compared with 81% today.
Total demand for renewable energy sources, such as hydroelectricity, wind, solar and biofuels, would increase by 45% between 2019 and 2050.
Industrial Info is tracking more than $52 billion worth of active power generation projects in Canada that involve renewable energy, including more than $36 billion worth that fall in the high- and medium-probability ranges. Of those, more than $26 billion belongs to hydropower projects (including Muskrat Falls); more than $6.7 billion belongs to wind projects; and more than $3 billion is earmarked for solar and other renewables.
Near the town of Jenner in southeast Alberta, Power Corporation of Canada's (Montreal, Canada) 122.4-MW Jenner Wind Energy Project is in the late engineering stage. The project includes the installation of 29 wind turbine generators and is planned for completion in fourth-quarter 2021. For more information, see Industrial Info's project report.
Under the Evolving Scenario, Canada's fossil fuel consumption already peaked in 2019, and would be 35% lower by 2050. Coal would decline in the 2020s as it is phased out of electric generation.
Production of crude oil would increase from 4.9 million BBL/d in 2019 to 5.8 million BBL/d in 2039, where it would peak and then drop to 5.3 million BBL/d by 2050. Growth would largely come from expansions of existing in-situ oil sands projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
According to the agency's "Canada's Energy Future 2020: Energy Supply and Demand Projections to 2050" report, which was unveiled on November 24, Canada's crude oil production will fall by 335,000 barrels per day (BBL/d) this year compared with 2019. Western Canadian producers shut in oil production this year due to low prices, eventually cutting almost 1 million BBL/d of oil supply by mid-May 2020. Production increased in the latter half of 2020, along with rising prices.
Natural gas production was relatively stable in 2020. Prices in western Canada have been higher in 2020 compared with the past several years, according to the report. The high prices sustained Canadian natural gas production through the first half of 2020 at levels similar to 2019.
Industrial Info has tracked more than $4.2 billion in Canadian Oil & Gas Production project completions for 2020. In terms of total investment value, Alberta led the way with more than $1.9 billion, followed by Saskatchewan ($1.2 billion) and British Columbia ($1 billion).
One of the big-ticket Oil & Gas Production projects completed this year was Keyera Corporation's (Calgary, Canada) $453 million Pipestone 04-07 Shallow-Cut Sour Gas Processing Plant Addition, Phase I. Completed in mid-October, the 200 million-cubic-foot-per-day processing plant has acid gas injection capabilities, 24,000 BBL/d of condensate processing capacity and associated water disposal facilities, bringing total condensate processing capacity to 38,000 BBL/d. For more information, see Industrial Info's project report.
Industrial Info also is tracking more than $18 billion worth of medium- and high-probability Oil & Gas Production projects in Canada that are planned to kick off construction in 2021. Medium-probability projects are assessed as having a 70-80% likelihood of moving forward as planned, while high-probability projects have an 81-99% likelihood. With more than $13.7 billion in planned activity, Alberta has the lion's share of the kickoffs, followed by Saskatchewan and British Columbia.
Among the high-probability projects set for kickoff next year is Keyera's Pipestone Natural Gas Production and Condensate Field 2021 Drilling Program near Wembley, Alberta. The program will use existing well pads and drill 20-26 new wells to a depth of more than 3,500 meters, with a 3,000-meter horizontal leg with multiple individual hydraulic fracturing stages, to further evaluate and develop the field. It is estimated to have a 2022 year-end exit of 38,000 barrels of oil equivalent per day (BOE/d). For more information, see Industrial Info's project report.
Meanwhile, Canada's end-use energy consumption will fall by 6% this year as a result of the pandemic, the biggest drop since at least 1990, according to the CER report. Electricity generation will fall by 3% in 2020, or 19 terawatt hours, driven by lower demand, the report said.
The report includes two scenarios for Canadian energy consumption and production trends over the next 30 years: the "Reference Energy System Scenario" and the "Evolving Energy System Scenario."
The Reference Scenario considers a future where action to reduce greenhouse gas emissions does not develop beyond measures currently in place.
"Globally, this implies stronger demand for fossil fuels, resulting in higher international market prices compared to the Evolving Scenario. Low carbon technologies with existing momentum continue to improve, but at a slower rate than in the Evolving Scenario," the report says.
Fossil fuels would still make up 60% of the nation's energy mix by 2050 under the Reference Scenario, as improvements in energy efficiency offset population growth and increasing industrial output, particularly in Canada's oil sands. This scenario includes "significantly higher" assumed crude oil prices, greater volumes of assumed liquefied natural gas (LNG) exports, moderately higher natural gas prices, and a "lack of additional domestic climate policies beyond those currently in place," which will drive higher crude oil and natural gas production.
In Canada's electricity mix, natural gas would play a larger role by 2050 under the reference scenario, and renewable and nuclear generation remain at 81% of generation.
Industrial Info is tracking more than $65 billion worth of high- and medium-probability power generation projects in Canada. One big-ticket item is Nalcor Energy's (St. John's, Newfoundland and Labrador) $7 billion grassroot, 836-megawatt (MW) Muskrat Falls Hydro Station near Churchill Falls, Newfoundland and Labrador. Final commissioning is underway, with completion expected by third-quarter 2021. The facility consists of a spillway, three dams and a powerhouse, and will be the second-largest hydroelectric facility in the province when complete, according to Nalcor.
Canada's federal government will temporarily waive debt payments owed by Nalcor Energy, a province-owned corporation, "to help ensure that the Lower Churchill projects are financially sustainable," according to a news release issued on December 17 by Canadian Prime Minister Justin Trudeau. The province would have been required to pay C$844 million (US$653 million), C$780 million (US$603 million) of which would have been due by the end of December and added to the provincial debt, at a time when Newfoundland and Labrador is projecting a C$1.84-billion (US$1.42 billion) deficit in its latest budget, according to local news accounts. For more information, see Industrial Info's project report .
Evolving Scenario
The Evolving Scenario assumes "a hypothetical suite of future domestic policy developments that build upon current climate and energy policies," the report says. Total renewable and nuclear demand across the energy system would increase by 31% by 2050. Ninety percent of Canada's electricity generation would come from renewable and nuclear generation, compared with 81% today.
Total demand for renewable energy sources, such as hydroelectricity, wind, solar and biofuels, would increase by 45% between 2019 and 2050.
Industrial Info is tracking more than $52 billion worth of active power generation projects in Canada that involve renewable energy, including more than $36 billion worth that fall in the high- and medium-probability ranges. Of those, more than $26 billion belongs to hydropower projects (including Muskrat Falls); more than $6.7 billion belongs to wind projects; and more than $3 billion is earmarked for solar and other renewables.
Near the town of Jenner in southeast Alberta, Power Corporation of Canada's (Montreal, Canada) 122.4-MW Jenner Wind Energy Project is in the late engineering stage. The project includes the installation of 29 wind turbine generators and is planned for completion in fourth-quarter 2021. For more information, see Industrial Info's project report.
Under the Evolving Scenario, Canada's fossil fuel consumption already peaked in 2019, and would be 35% lower by 2050. Coal would decline in the 2020s as it is phased out of electric generation.
Production of crude oil would increase from 4.9 million BBL/d in 2019 to 5.8 million BBL/d in 2039, where it would peak and then drop to 5.3 million BBL/d by 2050. Growth would largely come from expansions of existing in-situ oil sands projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
