Updated June 2020
Figure S5.7 shows marketable gas demand within Alberta by sector and gas available for removal.
Demand
In 2019
Demand for natural gas within Alberta accounted for nearly 60 per cent of the total Alberta supply of marketable natural gas in 2019, increasing by 2.1 per cent to 172.5 million cubic metres per day (106 m3/d), or 6.1 billion cubic feet per day (Bcf/d). The increase was driven primarily by commercial demand and electricity generation. The remaining gas was removed from the province.
Demand for natural gas
- increased by 14.6 per cent in the commercial sector
- increased by 7.5 per cent in the electricity generation sector
The increase in demand from electricity generation was largely driven by the continuous decline in coal generation, as a result of units being mothballed and accelerated coal-to-gas transitions, with natural gas and the availability of combined-cycle generation increasing to offset the decrease in coal.
Forecast for 2020 to 2029
Alberta demand for natural gas is expected to grow annually by an average of 2.5 per cent, increasing by nearly 28 per cent overall by 2029 relative to 2019. Growth is primarily expected to be attributed to increasing demand from the oil sands and electricity generation sectors, particularly with the retirement of coal-fired generators and the increase in coal-to-gas conversions.
Oil Sands
Demand in this sector is lower than it has been in previous forecasts. Lower oil sands production is expected, and a number of in situ project deferrals are anticipated to have longer-lasting effects in reducing demand.
Electricity Generation
Natural gas demand in the power sector is projected to grow by 58.5 per cent between 2019 and 2029. Demand from electricity generation is expected to increase based on company's plans to phase-out coal-fired electricity generation and implement coal-to-gas conversions.
Reprocessing Plant Shrinkage
Reprocessing plant shrinkage is expected to decrease annually by an average of 6.8 per cent as removals decline and less gas flows through the straddle plants that are usually found along Alberta's borders.
Petrochemical Plants
Gas demand by petrochemical plants is expected to increase annually at an average rate of 1.3 per cent throughout the forecast period because of incentives under the proposed Petrochemicals Diversification Program to develop petrochemical facilities and with the addition of both Inter Pipeline's Heartland Petrochemical Complex and Canada Kuwait Petrochemical Corporation's PDH/PP facility.
Residential and Commercial
Residential and commercial demand is expected to remain steady throughout the forecast period based on expectations of relatively moderate population growth over the forecast.
Removals
In 2019
Removals of natural gas from Alberta decreased by 12.2 per cent in 2019 (not including any changes in storage). Lower gas production and increasing domestic demand contributed to the decrease in removals from Alberta; a relatively mild winter and spring in the east compared to western Canada and the ability to source demand needs from the Appalachian basin played a role in this decline. The continued development and growth of U.S. shale resources such as the Marcellus formation; growth in U.S. associated natural gas from the Permian, Bakken, and Eagle Ford; and the buildout of pipeline infrastructure to meet U.S. domestic demand continues to displace Alberta gas from their traditional export markets into eastern Canada and the northeastern and midwestern states. The United States has been a net exporter of natural gas since 2017, and despite cold temperatures, a polar vortex at the end of January 2019, and continued demand increases across their power generation, residential and commercial sectors Alberta still witnessed a decline in removals to the United States, illustrating how saturated the U.S. gas market is.
Forecast for 2020 to 2029
Removals of gas produced in Alberta (excluding imports from BC) are projected to fall throughout the forecast period to 56.9 106 m3/d by 2029, which is 29 per cent lower than last year's forecast of 80.4 106 m3/d. The drop is expected because of declining Alberta production toward the end of the outlook and increased demand from the oil sands, petrochemical, and electricity generation sectors.
The volumes and analysis above do not account for B.C. production and imports into Alberta; this is based of Alberta production, demand, and the leftover Alberta production available for removal. It is anticipated that the implementation of the North Montney mainline project will increase imports into Alberta, increasing western Canadian gas removals from Alberta (Alberta + British Columbia).