October 2011, Vol. 238 No. 10
In The News
Natural Gas Gains Favor With Power Generators
The rapid growth of Canada’s oil sands is expected to dramatically increase its consumption of natural gas over the coming decade, a prospect that stands to help Alberta’s gas industry but raise the country’s emissions.
A new estimate by Ziff predicts oil sands gas consumption will rise to 3 Bcf/d, up from 1.1 Bcf/d. The rise will be propelled by a major expansion of oil sands production, which is expected to at least double its output between now and 2020 amid an investment deluge.
The increase in gas consumption would take a substantial percentage of Alberta’s output. Last year, the province produced 11 Bcf/d; if that remains constant, the oil sands would consume nearly 30% of the total in a decade, up from 10%. Ziff calculates each additional billion cubic feet of daily demand will drive up gas prices by 25 cents per 1,000 cubic feet – or 50 cents for the 2 Bcf increase in oil sands demand.
“Gas demand for the oil sands sector will account for 4% of the total North America gas demand in 2020,” said Julia Sagidova, Gas Analyst at Ziff Energy.
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