I​n situ oilsands to grow by at least one million barrels per day: NEB

Despite lower oil prices and stricter restrictions on carbon emissions, in situ oilsands production is expected to grow by at least one million barrels per day between now and 2040, according to the National Energy Board (NEB).

Canada’s energy regulator released its annual outlook report on Canada’s Energy Future last week, which examines three different paths the market could follow.

Here’s a snapshot of what each of these looks like, and how the oilsands plays out.

Reference case

  • The NEB says its reference case is based on a current economic outlook, a moderate view of energy prices and climate and energy policies that have been announced at the time of analysis.
  • Brent oil pricing reaches US$75/bbl in 2022 and then averages US$80/bbl between 2026 and 2040.
  • The Canadian price for carbon is held at $50/tonne between 2022 and 2040.
  • No new oilsands mining projects are built, and mining production stays flat at about 1.5 million bbls/d between 2020 and 2040.
  • In situ operators do not broadly implement steam/solvent processes.
  • In situ oilsands production increases from 1.4 million bbls/d in 2016 to 3.0 million bbls/d in 2040.
  • The average in situ steam to oil ratio (SOR), a key measure of efficiency, drops from 3.0:1 currently to about 2.25:1
  • Oilsands production increases from 2.5 million bbls/d in 2016 to 4.5 million bbls/d in 2040.

Higher carbon price case

  • This case assumes the Canadian price for carbon increases steadily by $5 per tonne per year after reaching $50 per tonne in 2022, to $90/tonne in 2030 and $140/tonne in 2040.
  • Brent averages reaches US$75 in 2022 and then holds steady there to 2040.
  • No new oilsands mining projects are built and mining production stays flat at about 1.5 million bbls/d between 2020 and 2040.
  • In situ operators do not broadly implement steam/solvent processes.
  • The average SOR drops from 3.0:1 to about 2.25:1.
  • Oilsands production reaches 4.0 million bbls/d in 2040, supported by a 1.1 million bbl/d increase for in situ volumes, from 1.4 million bbls/d in 2016 to 2.5 million bbls/d in 2040.

Technology case

  • The NEB’s final case considers, in addition to higher carbon prices, the impact on the Canadian energy system of greater adoption of select emerging production and consumption energy technologies.
  • This includes greater cost decreases for solar and wind electrical generating capacity, faster uptake of electric vehicles, greater electrification of space and water heating commercially and residentially, and increasing use of carbon capture and storage.
  • Brent reaches US$75bbl in 2022 but then starts decreasing, approaching $60/bbl in 2040.
  • In this case, the NEB assumes that in situ oilsands operators increasingly implement steam/solvent processes. This actually results in slightly higher production than the middle case as bitumen production rates increase while natural gas consumption declines (exact figure not given).
  • Higher production is more than offset by lower SORs, with in situ oilsands energy demand 6.5 percent lower in 2040 than the higher carbon price case.
  • The average SOR goes from 3.0:1 currently to 2.0:1 in 2040.

The NEB’s analysis assumes that “all energy production will find markets and infrastructure will be built as needed.”

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