Renewables gathering power, but oil remains the king: NEB

CALGARY — Fossil fuels will still be the dominant source of energy for Canadians more than two decades from now, but renewable power sources will play a bigger role, the National Energy Board said in a report released Tuesday.

CALGARY — Fossil fuels will still be the dominant source of energy for Canadians more than two decades from now, but renewable power sources will play a bigger role, the National Energy Board said in a report released Tuesday.

Canada’s oil production will double from last year’s rates to about six million barrels per day by 2035, the federal energy watchdog said.

But power generated by renewable sources like wind, biomass and geothermal will also grow, along with cleaner-burning transportation fuels.

Canada is expected to produce six million barrels of oil per day in 2035, double last year’s rates. Of that, 85 per cent will be from the Alberta oilsands, compared to 54 per cent in 2010, the board said.

Oilsands bitumen production is set to reach 5.1 million barrels per day 24 years from now, triple last year’s levels.

The majority of that growth is expected to come from in-situ extraction methods, in which bitumen is pumped to the surface from wells deep underground using various technologies.

“In situ projects are smaller and less expensive to build so the cost of entry is lower” than open-pit mining methods, the NEB said in the report. “Also, 80 per cent of the oilsands reserves are considered well suited to in situ extraction, versus 20 per cent for mining methods.”

Meanwhile, the share of biofuels used by the transportation sector is expected to triple to 3.3 per cent because of government policies to promote the use of cleaner-burning fuels.

The share of electrical generation with renewable power sources is set to rise from 62 per cent in 2010 to 68 per cent.

The share of wind in the energy mix is set to grow from one per cent to six per cent between 2010 and 2035, while geothermal, biomass and solar are predicted to grow from two per cent to six per cent over that period. But hydroelectric, wave and tidal will shrink from 59 per cent to 56 per cent due to faster growth in other renewable sources.

Natural gas-fired power is expected to grow from nine per cent to 15 per cent, as power plants make the switch from coal, which has far higher greenhouse gas emissions.

Natural gas supply is expected to lag demand, meaning less is available for export. Supply is expected to grow 33 per cent between this year and 2035, while demand increases 51 per cent over that period.

“Demand increases in Canada are largely from the oilsands sector and for power generation,” the report said.

The National Energy Board also expects energy demand growth to slow to 1.3 per cent over the forecast period, compared to 1.4 per cent growth between 1990 and 2008.

“Factors reducing demand include slowing population growth, higher energy prices, lower economic growth, and enhanced efficiency and conservation programs,” the board said in a news release.

“While demand will slow considerably in the residential, commercial and transportation sectors, it will be partially offset by industrial-sector demand growth. The industrial sector accounted for almost half of Canadian energy demand in 2010.”

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