Oilsands thirst for natural gas grows to nearly one-third of Canadian demand

File: An oilsands facility is seen near Fort McMurray, Alta.
File: An oilsands facility is seen near Fort McMurray, Alta. Jeff McIntosh, The Canadian Press

Nearly one-third of the natural gas burned in Canada last year was used to produce oil from the oilsands, according to the National Energy Board.

The federal regulator says nearly 2.38 billion cubic feet per day or a record 29 per cent of purchased natural gas was used for oilsands production in northern Alberta in 2016. That compared with 730 million cf/d or 12 per cent of total demand in 2005.

Overall Canadian natural gas demand increased over the same period by 34 per cent to an estimated 8.27 billion cf/d from 6.17 billion cf/d.

Natural gas is largely used in the oilsands to generate steam to inject into underground formations to thin the heavy, sticky bitumen crude and allow it to be pumped to surface. The growth in so-called “thermal” projects is the main driver behind increased oilsands demand for natural gas, the NEB says.

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Environmentalists were quick to describe the oilsands industry use as a waste of a cleaner-burning resource that would be better used to heat homes, generate electricity or create plastics.

The NEB report points out that Alberta spot prices for natural gas plunged to a record low in May of last year as wildfire activity near Fort McMurray forced the shutdown of gas supply pipelines to northern Alberta oilsands projects.

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