Alberta Reaches Highest Production Level of Natural Gas Since 2010: Report

Aerial view of the Suncor mine facility along the Athabasca River in the oilsands near Fort McMurray, Alberta, in a file photo. Jeff McIntosh/The Canadian Press

Alberta boasted a 7 percent increase in marketable natural gas in 2022, reaching the highest production level since 2010, according to the latest report from the Alberta Energy Regulator.

The 2023 Alberta Energy Report was published June 27, and provides independent information on the state of reserves and the supply and demand outlook for the province’s energy resources, including crude bitumen, crude oil, natural gas, natural gas liquids, coal, and emerging resources like lithium.

According to the Alberta Energy Regulator, crude oil and equivalent production in Alberta averaged about 4.1 million barrels per day during the January to February period, an increase of about 5 percent compared with this same period in 2022.

The energy sector is seeing continuous growth in oil sands, conventional oil, and natural gas, and capital expenditure was also up significantly in 2022.

“Oil and gas companies responded to higher prices by expanding production to boost revenues. With additional cash on hand, companies grew capital spending while reducing debt, buying back stocks, and increasing shareholder dividends,” said the report.

The production increase mainly came from nonupgraded bitumen, followed by light and medium crude oil. Meanwhile, the total production of oil and equivalent set new records and reported favourable market prices in 2022.

“With the significant disruption to the natural gas supply in Europe, demand pressures for this commodity reshaped the trade flows globally,” said the report.

Total capital expenditures for crude oil, natural gas, oil sands, and emerging resources increased to $26.6 billion in 2022, exceeding the pre-pandemic spending in 2019, the report indicated.

Accordingly, investments in crude oil and natural gas drilling grew by 73 percent in response to higher energy prices, which the report said reflected a shorter return on investment. Oil sands also reportedly achieved a 15 percent increase in 2022.

“Alberta has notable hydrogen production and growth opportunities for geothermal energy, helium, and lithium. Hydrogen production is estimated to increase from 2.5 million tonnes per year in 2022 to 3.6 million tonnes per year in 2032, with an average annual growth rate of 4 percent,” the report said.

Lithium as an emerging resource also promises expansion of growth. Although the province does not currently produce it, several companies have announced potential projects, pointing to the global demand for lithium batteries.

“The total production in Alberta is forecast to rise to 7.6 thousand tonnes of lithium chemical compounds by 2032,” said the report.

Brian Jean, the newly appointed Alberta minister of Energy and Minerals, said in a June 28 news release that “every credible forecaster predicts that oil and gas will continue to dominate the energy sector for decades to come.”

Jean said Alberta plans to “continue to fight for our energy sector and stand up against federal policies that prematurely signal the end of the country’s oil and gas sector and threaten to derail the economic future and livelihood of Canadians.”

Jean said the “goal is to reduce emissions—not to transition away from a sector that is a key source of employment, economic growth and revenues for Canada.”

“The oil and gas industry in Alberta is incredibly important for the entire country,” said Jean. He said the Alberta government “has proposed a bilateral working group that includes both the federal and Alberta governments to look at ways to incentivize carbon capture, utilization and storage and other emissions-reducing infrastructure while also setting realistic milestones through to 2050.”

The province is now waiting for Ottawa’s response.