Nuclear provider targets oilsands
Natural gas shortage looms by 2030: Areva
Shaun Polczer, Calgary Herald
Published: Tuesday, February 26, 2008
Alberta's oilsands industry faces a natural gas shortage by 2030 without new energy sources to offset gas use in oilsands expansions, the head of nuclear power giant Areva Canada Inc. said Monday.
Speaking in Calgary, Areva CEO Armand Laferrere said continued oilsands development would consume virtually all of Canada's current natural gas supply -- some 92 per cent -- by 2030.
"You need to diversify," he said on the sidelines of the Canadian Energy Research Institute's natural gas conference.
"Natural gas will be part of it, but you need also to have other sources of energy, and nuclear, being competitive and being entirely greenhouse gas free, seems to me to be an obvious part of it."
According to Bill Gwozd, a natural gas supply consultant with Ziff Energy Group in Calgary, growing natural gas demand within Alberta will more than outstrip the available supply by 2028.
Demand from all sources in the province -- including residential heating, electricity generation and industrial use -- is currently about 3.5 billion cubic feet (bcf) per day, a figure that is expected to rise to 6.8 bcf per day over the next two decades.
Over the same period, Alberta's natural gas production is expected to fall from 13 bcf per day in 2007 to 6.7 bcf per day in 2028, leaving a potential shortfall of more than 100 million cubic feet per day.
Without the proposed Mackenzie Valley pipeline, Alberta would be forced to import costly liquefied natural gas (LNG) or sharply curtail gas exports that currently account for about a fifth of U.S. supplies.
If predictions of a shortage bear out, oilsands projects would either be forced to shut down or switch to alternative fuels to generate the heat needed to produce steam, Gwozd suggested.
"We're in a very delicate balance," he said. "That gets into priorities, whether it's more important to run our Nintendos, cellphones and laptops than have enough gas to produce oil for valuable export markets.
"It's just shock and awe that there's no (government) policy. I'm surprised nobody cares."
But Bob Dunbar, an oilsands consultant with Strategy West Inc., said Areva's numbers fail to account for efficiency improvements that are bound to occur between now and 2030.
Several projects underway are trying to circumvent the need for gas to generate steam in thermal operations by using alternate recovery techniques.
"It makes the assumption that gas intensity for the industry will continue the way it is," he said. "They've already made a lot of progress. The industry knows natural gas is in short supply and they are looking at alternatives. . . . Nuclear is one of them."
Already, several operators are looking at ways to reduce or curtail natural gas use in their oilsands operations.
OPTI Canada and Nexen Inc. are set to begin production at Long Lake, which uses coke gasification to provide the fuel needed to fire the central upgrading unit.
Other companies such as Petrobank Inc. have devised an in-situ "fire flood" that uses virtually no gas or water to produce partially upgraded oil.
spolczer@theherald.canwest.com
http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=d...
