The Alberta Energy Regulator (AER) has released a new report forecasting a significant increase in the province’s oilsands production, projecting growth of over 17 percent by 2033. According to the latest annual forecast released on Monday, the AER predicts that raw bitumen production will rise to four million barrels per day by 2033, up from the 3.4 million barrels per day recorded last year.
The majority of this growth is expected to come from in situ operations, which use steam to extract oil from deep below the earth’s surface, rather than from oilsands mines.
The report suggests that oilsands will continue to be the leading driver of Alberta’s energy sector, despite the AER acknowledging increased growth opportunities in alternative energy sources such as hydrogen, geothermal, helium, and lithium.
In 2023, bitumen from the oilsands accounted for 66 percent of Canada’s total oil equivalent production, per AER data. However, the sector faces growing scrutiny for its high emissions. The oil and gas industry is Canada’s largest emitter, and rising oilsands production has led to increased total emissions, even as other sectors are reducing theirs.
The federal government has proposed capping oil and gas emissions to combat climate change, requiring the industry to reduce greenhouse gas emissions by 35 to 38 percent from 2019 levels by 2030. Alberta opposes this cap, viewing it as a limit on production that would hinder growth and investment.
Despite this, the AER believes that the oilsands can expand while reducing emissions through carbon capture and storage (CCS) technology. A consortium of oilsands companies, the Pathways Alliance, is considering a large CCS network in northern Alberta to lower emissions from production sites but has yet to make a final investment decision.
Conversely, a recent Deloitte report argued that faced with a federally mandated emissions cap, oilsands companies might opt to reduce production rather than invest in costly CCS technology.
The AER also projects global oil prices will rise, with U.S. benchmark West Texas Intermediate crude averaging US$76 per barrel this year and increasing to US$83.63 by 2033.
Different forecasters have varied outlooks for oil demand and prices. The International Energy Agency expects oil demand to grow until 2030 but warns of a potential supply glut that could lower prices. Goldman Sachs predicts oil demand will peak in 2034 and then plateau for several years. The Canada Energy Regulator outlines scenarios where future oil demand depends significantly on global climate commitments.
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