Oilsands reserves still 97 per cent intact: Oilsands reserves still 97 per cent intact: energy regulator
CALGARY (CP) - Only 2.8 per cent of Alberta's established oilsands reserves have been developed for production, despite major recent expansions in the sector, the province's energy regulator said Thursday.
Alberta's oilsands reserves are estimated at 174 billion barrels, despite nearly 40 years of production, said Alberta Energy and Utilities Board chairman Neil McCrank. "It's important for Albertans, and the world, to know that we have merely scratched the surface of Alberta's oilsands reserves, as only about three per cent of our bitumen reserves have been produced since 1967," McCrank said while releasing the board's annual reserves report.
Oilsands production actually fell two per cent last year, but that was attributed solely to a major fire at Suncor Energy's (TSX:SU) facility near Fort McMurray, Alta., in early 2005.
The fire slashed Suncor's output nearly in half for nine months, but the damage has been repaired and production is now significantly higher than pre-fire levels.
The Alberta regulator's report is the latest in a series of forecasts that predict continued massive growth in the oilsands sector. More than $100 billion worth of projects are scheduled for construction in the next decade due to continued near-record highs for crude and geopolitical tensions in many of the world's biggest crude-producing nations.
Earlier this month, the National Energy Board predicted oilsands production will triple in the next 10 years to three million barrels a day - a 40 per cent jump since its last report in 2004.
A similar report by the Canadian Association of Petroleum Producers predicted that oilsands production would hit four million barrels per day by 2020, accounting for more than 80 per cent of Canadian oil production.
And while conventional oil reserves are expected to constitute a smaller piece of Canada's overall energy production in the future, the Alberta regulator said Thursday that recoverable reserves actually rose two per cent to 1.6 billion barrels last year, due mainly to new technologies that enable more oil to be recovered from existing reservoirs.
But the province's conventional natural gas reserves continued to show sharper declines, as production from new drilling replaced 63 per cent of production last year, compared to 75 per cent replacement in 2004.
The Alberta energy regulator said conventional gas production declined two per cent last year. And it expects a similar two per cent this year, increasing to a three per cent decline starting in 2007.
At the same time, interest in the province's coalbed methane industry - recovering gas reserves that are trapped within coal seams - reached record levels.
The regulator said that more than 3,000 coalbed methane wells were drilled in Alberta last year, compared to just a few test wells in 2001.
"Obviously, conventional gas has turned the corner and there is less available today than there was yesterday," said McCrank.
With a mandate to ensure that Alberta has enough natural gas to meet its own residential and commercial needs in the future, the Alberta Energy and Utilities Board predicts that there will significantly less conventional gas available for export outside of the province.
But McCrank said production from coalbed methane and other unconventional gas reserves would likely continue to rise, helping fill the various export gas pipelines.