ST98-2012 Alberta’s Energy Reserves 2011 and Supply/Demand Outlook 2012–2021 ACKNOWLEDGEMENTS The following ERCB staff contributed to this report: Principal Authors: Reserves―Michael Teare, Andy Burrowes, Cathy Baturin-Pollock, Dean Rokosh, Curtis Evans, Patricia Gigantelli, and Rick Marsh; Supply/Demand and Economics―Banafsheh Ashrafi, Charles Tamblyn, Shimpei Ito, Andrea Willwerth, Mussie Yemane, Joseph Fong, Marie-Anne Kirsch, and Carol Crowfoot; Editors: Carol Crowfoot, Rick Marsh, Kevin Parks, and Fran Hein; Data: Debbie Giles, Judy Van Horne, Glen Tsui, and Afshan Mahmood; Production: Jennifer Wagner, Nicole Dunn, Aaron Dalton, Sarah Hamza, Karen Logan, Robert de Grace, and Jessica Riches; Communications Advisor: Darin Barter Coordinator: Rick Marsh For inquiries regarding reserves, contact Rick Marsh at 403-297-8218 or Andy Burrowes at 403-297-8566. For inquiries regarding supply/demand, contact Marie-Anne Kirsch at 403-297-8476. ENERGY RESOURCES CONSERVATION BOARD ST98-2012: Alberta’s Energy Reserves 2011 and Supply/Demand Outlook 2012–2021 ISSN 1910-4235 June 2012 The following related documents are also available from ERCB Information Services (telephone: 403-297-8311; when connected, press 2): • CD with detailed data tables for crude oil and natural gas, as well as map of Designated Fields, Oil Sands Areas, and Development Entities, $546 • CD with Gas Reserves Code Conversion File, $459 • CD with Gas Pool Reserve File (ASCII format), $3095 • CD with Oil Pool Reserves File (ASCII format), $1834 • Map of Designated Fields, Oil Sands Areas, and Development Entities: 60 x 101 cm, $61; 33 x 54 cm, $29 Published by Energy Resources Conservation Board Suite 1000, 250 – 5 Street SW Calgary, Alberta T2P 0R4 Toll-free: 1-855-297-8311 Fax: 403-297-7040 Website: www.ercb.ca ERCB ST98-2012: Alberta’s Energy Reserves 2011 and Supply/Demand Outlook—Contents Contents OVERVIEW..................................................................................................................................................................1 Summary of Energy Reserves, Production, and Demand in Alberta ..............................................................1 Reserves.........................................................................................................................................................1 Production......................................................................................................................................................2 Energy Demand .............................................................................................................................................3 Alberta Hydrocarbon Production in the Canadian Perspective ......................................................................4 Oil and Gas Prices and Alberta’s Economy.......................................................................................................6 Crude Oil Prices—2011.................................................................................................................................6 Crude Oil Prices—Forecast ...........................................................................................................................6 Natural Gas Prices—2011..............................................................................................................................6 Natural Gas Prices—Forecast ........................................................................................................................7 Alberta’s Economy—2011 ............................................................................................................................7 Alberta’s Economy—Forecast.......................................................................................................................8 Commodity Discussion ........................................................................................................................................8 Crude Bitumen and Crude Oil .......................................................................................................................8 Natural Gas ..................................................................................................................................................13 Ethane and Other Natural Gas Liquids ........................................................................................................16 Sulphur.........................................................................................................................................................17 Coal .............................................................................................................................................................18 Electricity.....................................................................................................................................................19 Oil and Gas Activity ..........................................................................................................................................20 Crude Oil .....................................................................................................................................................20 Natural Gas ..................................................................................................................................................20 1 ECONOMICS................................................................................................................................................... 1-1 1.1 Energy Prices ........................................................................................................................................... 1-1 1.1.1 World Oil Market........................................................................................................................... 1-1 1.1.2 International Oil Prices .................................................................................................................. 1-2 1.1.3 North American Gas and Oil Prices............................................................................................... 1-4 1.2 Oil and Gas Production Costs in Alberta............................................................................................. 1-13 1.3 Economic Performance ......................................................................................................................... 1-15 1.3.1 Alberta and Canada...................................................................................................................... 1-15 1.3.2 The Alberta Economy in 2011 and the Economic Outlook.......................................................... 1-16 2 RESOURCE ENDOWMENT ......................................................................................................................... 2-1 2.1 Geological Framework of Alberta .......................................................................................................... 2-1 2.1.1 Western Canada Sedimentary Basin .............................................................................................. 2-1 i ERCB ST98-2012: Alberta’s Energy Reserves 2011 and Supply/Demand Outlook—Contents 2.1.2 Alberta’s Petroleum Systems .........................................................................................................2-3 2.1.3 Energy Resource Occurrences—Plays, Deposits, and Pools..........................................................2-6 2.2 Resource Appraisal Methodologies.........................................................................................................2-7 2.2.1 Resource Estimation.......................................................................................................................2-7 2.2.2 Reserves Determination .................................................................................................................2-8 2.2.3 Ultimate Potential...........................................................................................................................2-8 2.3 Resources and Reserves Classification System ......................................................................................2-9 3 CRUDE BITUMEN ..........................................................................................................................................3-1 3.1 Reserves of Crude Bitumen.....................................................................................................................3-2 3.1.1 Provincial Summary.......................................................................................................................3-2 3.1.2 Initial In-Place Volumes of Crude Bitumen ...................................................................................3-4 3.1.3 Established Reserves ....................................................................................................................3-12 3.1.4 Ultimate Potential of Crude Bitumen ...........................................................................................3-15 3.2 Supply of and Demand for Crude Bitumen .........................................................................................3-15 3.2.1 Crude Bitumen Production—2011 ...............................................................................................3-16 3.2.2 Crude Bitumen Production—Forecast..........................................................................................3-23 3.2.3 Supply Costs.................................................................................................................................3-29