Updated May 2022
Figure S5.7 shows marketable gas demand within Alberta by sector and gas available for removal.
Demand
In 2021
Demand for natural gas within Alberta increased 8.5 per cent from 2020, accounting for 67 per cent of marketable production volumes, or 184.9 million cubic metres per day 106 m3/d (6.6 billion cubic feet per day [Bcf/d]). This is the largest annual growth in total gas demand since 2013 and highlights a strong recovery in economic activity and energy use in the province.
Natural gas demand increased across all sectors with a significant growth across the electricity generation and oil sands sectors. The faster-than-expected phase-out of coal power plants boosted demand in the electricity generation sector, while strong oil prices supported a solid growth in the oil sand sector. Both these factors increased the demand for natural gas.
Forecast for 2022 to 2031
Total domestic demand for natural gas in Alberta is estimated to reach 221.9 106 m3/d (7.9 Bcf/d) by 2031, growing at an average of 2.0 per cent annually. This represents a slowdown relative to the previous decade when demand increased by an average of 3.9 per cent per year.
Gas demand is anticipated to grow over the forecast in below sectors:
- Oil sands demand is expected to account for 53 per cent of the growth over the forecast, driven by increasing use from oil sands in situ operations.
- Electricity generation is expected to account for 28 per cent of the growth over the forecast. This is driven by forecasted increase in cogeneration at oil sands facilities as well as coal-to-gas conversions in the power generating sector.
- Other sectors combined (including residential, commercial, non-oil sands industrial, and transportation) will account for the remaining growth in demand. Demand is expected to increase at an annual rate just above one per cent, driven up by economic and population growth and partially offset by energy efficiency gains.
Removals
In 2021
Following a modest growth in 2020, natural gas removals from Alberta (i.e., transfers to other provinces and exports to the U.S.) decreased by 22 per cent in 2021. This was due to lower marketable gas production levels and a strong growth in domestic use.
Forecast for 2022 to 2031
Removals are estimated to decline steadily over the forecast at 3.6 per cent per year to 59.1 106 m3/d (2.1 Bcf/d) by 2031, which is slightly below the 4.1 per cent annual decline over the past decade. This will occur as domestic demand is expected to grow over the same period while production remains relatively steady.
Various projects are in the works to improve market access for western Canadian natural gas. Alberta's natural gas will increasingly compete for pipeline capacity with rising production from mainly British Columbia, where producers are also likely to benefit most from liquefied natural gas (LNG) export projects. An overall increase in market access over the forecast will directly benefit Alberta producers via reduced infrastructure congestion and improved commodity pricing.