Alberta's Energy Reserves 2007 and Supply/Demand Outlook 2008-2017 Energy Resources Conservation Board Ex LiBRIS Universitatis ACKNOWLEDGEM Albertensis The following ERCB Andy Burrowes, Rick Marsh, Nehru Ramdin, and Curtis Evans; Supply/Demand and Economics — Marie-Anne Kirsch, Katherine Elliott LeMoine Philp, Joanne Stenson, Mussie Yemane, Ken Schuldhaus, Greig Sankey, and Pat Harrison; Editors: Cal Hill, Carol Crowfoot, Joseph MacGillivray, and Farhood Rahnama; Data: Debbie Giles and Judy Van Home; Production: Ona Stonkus, Binh Tran, Carlee Weisbeck, Tyla Willett, Karen Logan, and Robert de Grace; Communications Advisor: Bob Curran Coordinator: Farhood Rahnama For inquiries regarding reserves, contact Andy Burrowes at 403-297-8566. For inquiries regarding supply/demand, contact Marie-Anne Kirsch at 403-297-8476. ENERGY RESOURCES CONSERVATION BOARD ST98-2008: Alberta's Energy Reserves 2007 and Supply/Demand Outlook 2008-2017 ISSN 1910-4235 June 2008 The CD containing the detailed data tables is available for $500 from ERCB Infonnation Services (telephone: 403-297-831 1; w hen connected, press 2). CD-ROM ISSN 1499-1187 Published by Energy Resources Conservation Board 640 - 5 Avenue SW Calgary, Alberta T2P 3G4 Telephone: 403-297-8311 Fax: 403-297-7040 Web site: www.ercb.ca Contents Overview 1 Table Reserves and production summary, 2007 3 Figures 1 Total energy production in Alberta 2 2 Alberta oil reserves 4 3 Alberta supply of crude oil and equivalent 5 4 Total marketable gas production and demand 7 5 Drilling activity in Alberta, 1 948-2007 9 6 Alberta conventional crude oil production and price 10 7 Alberta mined bitumen production and synthetic crude oil production and price 10 8 Alberta in situ bitumen production and price 1 1 9 Historical natural gas production and price 12 10 Sulphur closing inventories in Alberta and price 13 1 1 Historical coal production and price 13 1 Energy Prices and Economic Performance 1-1 1.1 Global Oil Market 1-1 1 .2 North American Energy Prices 1-4 1.2.1 North American Crude Oil Prices 1-4 1.2.2 North American Natural Gas Prices 1-8 1.2.3 Electricity Pool Prices in Alberta 1-11 1.3 Oil and Gas Production Costs in Alberta 1-12 1 .4 Canadian Economic Performance 1-14 1 . 5 Alberta Economic Outlook 1-17 Tables 1 . 1 Monthly pool prices and electricity load 1-1 1 1 .2 Alberta median well depths by PS AC area, 2007 1-13 1.3 Major Canadian economic indicators, 2007-2017 1-14 1.4 Major Alberta economic indicators, 2007-2017 1-17 1 .5 Value of Alberta energy resource production 1-20 Figures 1 . 1 OPEC crude basket reference price, 2007 1-2 1 .2 Growth in world oil demand, 2006-2008 1-3 1.3 Price of WTI at Chicago 1-6 1 .4 Average price of oil at Alberta wellhead 1-6 1.5 2007 average monthly reference prices of crudes in Alberta 1-7 1.6 U.S. operating refineries by PADD, 2007 1-9 1.7 Average price of natural gas at plant gate 1-9 1 . 8 Alberta wholesale electricity prices 1-12 1.9 Alberta well cost estimates by PS AC area 1-13 1.10 Canadian economic indicators 1-15 1.11 Alberta real investment 1-19 2 Crude Bitumen 2-1 2. 1 Reserves of Crude Bitumen 2-2 2.1.1 Provincial Summary 2-2 2. 1 .2 Initial in-Place Volumes of Crude Bitumen 2-4 (continued) ERCB ST98-2008: Alberta's Energy Reserves 2007 and Supply/Demand Outlook / C ontents • i 2.1.3 Surface-Mineable Crude Bitumen Reserves 2- 1 1 2.1.4 In Situ Crude Bitumen Reserves 2-12 2.1.5 Ultimate Potential of Crude B itumen 2-13 2.1.6 Ongoing Review of In Situ Resources and Reserves 2-13 2.2 Supply of and Demand for Crude Bitumen 2-14 2.2. 1 Crude Bitumen Production 2-15 2.2.1.1 Mined Crude Bitumen 2-15 2.2.1.2 In Situ Crude Bitumen 2-17 2.2.2 Synthetic Crude Oil Production 2-20 2.2.3 Pipelines 2-22 2.2.3.1 Existing Alberta Pipelines 2-23 2.2.3.2 Proposed Alberta Pipeline Projects 2-25 2.2.3.3 Existing Export Pipelines 2-25 2.2.3.4 Proposed Export Pipeline Projects 2-27 2.2.4 Petroleum Coke 2-27 2.2.5 Demand for Synthetic Crude Oil and Nonupgraded Bitumen 2-28 Tables 2. 1 In-place volumes and established reserves of crude bitumen 2-3 2.2 Reserve and production change highlights 2-3 2.3 Initial in-place volumes of crude bitumen 2-10 2.4 Mineable crude bitumen reserves in areas under active development as of December 31, 2007 2-11 2.5 In situ crude bitumen reserves in areas under active development as of December 31, 2007 2-13 2.6 Alberta SCO and nonupgraded bitumen pipelines 2-23 2.7 Export pipelines 2-26 2.8 Proposed export pipeline projects 2-27 Figures 2.1 Alberta's oil sands areas 2-1 2.2 Remaining established reserves under active development 2-4 2.3 Bitumen pay thickness of Athabasca Wabiskaw-Mc Murray deposit 2-6 2.4 Bitumen pay thickness of Cold Lake Clearwater deposit 2-7 2.5 Bitumen pay thickness of Peace River Bluesky-Gething deposit 2-8 2.6 Reconstructed structure contours of the sub-Cretaceous unconformity at the end of Bluesky/Wabiskaw time 2-9 2.7 Production of bitumen in Alberta, 2007 2-16 2.8 Alberta crude oil and equivalent production 2-16 2.9 Total in situ bitumen production and producing bitumen wells 2-18 2.10 In situ bitumen production by oil sands area 2-18 2.11 In situ bitumen production by recovery method 2-19 2. 1 2 Alberta crude bitumen production 2-20 2.13 Alberta synthetic crude oil production 2-23 2.14 Alberta SCO and nonupgraded bitumen pipelines 2-24 2.15 Canadian and U.S. crude oil pipelines 2-26 2.16 Alberta oil sands upgrading coke inventory 2-28 2.17 Alberta demand and disposition of crude bitumen and SCO. 2-29 3 Crude Oil 3-1 3 . 1 Reserves of Crude Oil 3-1 3.1.1 Provincial Summary 3-1 3.1.2 Reserves Growth 3-1 (continued) UMIVERSITY LIBRARY UNiv'ERSITY OF ALBERTA ii • ERCB ST98-2008: Alberta's Energy Reserves 2007 and Supply/Demand Outlook / C ontents 3.1.3 Oil Pool Size 3-4 3.1.4 Pools with Largest Reserve Changes 3-5 3.1.5 Distribution by Recovery Mechanism 3-5 3.1.6 Distribution by Geological Formation 3-7 3.1.7 Ultimate Potential 3-9 3.2 Supply of and Demand for Crude Oil 3-11 3.2.1 Crude Oil Supply 3-11 3.2.2 Crude Oil Demand 3-18 3.2.3 Crude Oil and Equivalent Supply 3-19 Tables 3.1. Reserve and production change highlights 3-2 3.2 Breakdown of changes in crude oil initial established reserves 3-3 3.3 Major oil reserve changes, 2007 3-6 3.4. Conventional crude oil reserves by recovery mechanism as of December 31, 2007 3-7 Figures 3.1 Remaining established reserves of crude oil 3-2 3.2 Annual changes in conventional crude oil reserves 3-3 3.3 Annual changes to waterflood reserves 3-3 3.4 Distribution of oil reserves by size 3-4 3.5 Oil pool size by discovery year 3-4 3.6 Initial established crude oil reserves based on recovery mechanisms 3-5 3.7 Geological distribution of reserves of conventional crude oil 3-8 3.8 Regional distribution of Alberta oil reserves 3-8 3.9 Alberta's remaining established oil reserves versus cumulative production 3-10 3.10 Growth in initial established reserves of crude oil 3-10 3.11 Alberta successful oil well drilling by modified PSAC area 3-1 1 3.12 Oil wells placed on production, 2007, by modified PSAC area 3-12 3.13 Initial operating day rates of oil wells placed on production, 2007, by modified PSAC area 3-12 3.14 Conventional crude oil production by modified PSAC area 3-13 3.15 Total crude oil production and producing oil wells 3-14 3.16 Number of producing oil wells and average day rates, 2007, by modified PSAC area. 3- 14 3.17 Crude oil well productivity in 2007 3-15 3.18 Total conventional crude oil production by drilled year 3-16 3.19 Comparison of crude oil production 3-16 3.20 Alberta crude oil price and well activity 3-17 3.21 Alberta daily production of crude oil 3-18 3.22 Capacity and location of Alberta refineries 3-19 3.23 Alberta demand and disposition of crude oil 3-19 3.24 Alberta supply of crude oil and equivalent 3-20 3.25 Alberta crude oil and equivalent production 3-20 4 Coalbed Methane 4-1 4. 1 Reserves of Coalbed Methane 4-1 4.1.1 Provincial Summary 4-1 4. 1 .2 Detail of CBM Reserves and Well Performance 4-2 4. 1 .3 Commingling of CBM with Conventional Gas 4-2 4. 1 .4 Distribution of Production by Geologic Strata 4-5 4. 1 .5 Reserves Determination Method 4-5 4.1.6 Gas in-Place Ultimate Potential 4-6 4.2 Supply of and Demand for Coalbed Methane 4-6 (continued) ERCB ST98-2008: Alberta's Energy Reserves 2007 and Supply/Demand Outlook / C ontents • ill Tables 4.1. Changes in CBM reserves, 2007 4-2 4.2 CBM resources gas-in-place summary — constrained potential 4-6 Figures 4. 1 Development Entity No. 1 Edmonton/Belly River 4-4 4.2 Coalbed methane resource potential 4-7 4.3 Coalbed methane well connections by modified PS AC area 4-8 4.4 Number of producing CBM wells in Alberta by modified PSAC area 4-8 4.5 Average day rates of producing CBM wells by modified PSAC area 4-9 4.6 Coalbed methane production forecast from CBM wells 4-10 5 Conventional Natural Gas 5-1 5.1 Reserves of Natural Gas 5-1 5.1.1 Provincial Summary 5-1 5.1.2 Annual Change in Marketable Gas Reserves 5-2 5.1.3 Distribution of Natural Gas Reserves by Pool Size 5-7 5.1.4 Geological Distribution of Reserves 5-8 5.1.5 Reserves of Natural Gas Containing Hydrogen Sulphide 5-9 5.1.6 Reserves of Gas Cycling Pools 5-10 5.1.7 Reserves and Accounting Methodology for Gas 5-11 5.1.8 Multifield Pools 5-12 5.1.9 Ultimate Potential 5-13 5.2 Supply of and Demand for Conventional Natural Gas 5-16 5.2. 1 Natural Gas Supply 5-16 5.2.2 Natural Gas Storage 5-28 5.2.3 Alberta Natural Gas Demand 5-3 1 Tables 5.1 Summary of reserves and production changes 5-2 5.2 Major natural gas reserve changes, 2007 5-5 5.3 Distribution of natural gas reserves by pool size, 2007 5-7 5.4 Distribution of sweet and sour gas reserves, 2007 5-9 5.5 Distribution of sour gas reserves by H2S content, 2007 5-10 5.6 Remaining ultimate potential of marketable gas, 2007 5-14 5.7 Marketable natural gas volumes 5-17 5.8 Production decline rates for new well connections 5-25 5.9 Commercial natural gas storage pools as of December 31, 2007 5-29 5.10 Estimate of gas reserves available for inclusion in permits as at December 31, 2007 5-32 5.11 2007 oil sands average purchased gas use rates 5-34 Figures 5.1 Annual reserves additions and production of conventional marketable gas 5-2 5.2 Remaining conventional marketable gas reserves 5-3 5.3 New, development, and revisions to conventional marketable gas reserves 5-3 5.4 Conventional marketable gas reserves changes by modified PSAC area 5-4 5.5 Distribution of conventional gas reserves by size 5-7 5.6 Conventional gas pools by size and discovery year 5-8 5.7 Geological distribution of conventional marketable gas reserves 5-8 5.8 Remaining conventional marketable reserves of sweet and sour gas 5-10 5.9 Expected recovery of conventional natural gas components 5-12 5.10 Growth of initial established reserves of conventional marketable gas 5-13 5.11 Conventional gas ultimate potential 5-14 (continued) iv • ERCB ST98-2008: Alberta's Energy Reserves 2007 and Supply/Demand Outlook / C ontents 5.12 Regional distribution of Alberta gas reserves 5-15 5.13 Conventional gas in place by geological period 5-15 5.14 Alberta successful gas well drilling (conventional) by modified PS AC area 5-17 5.15 Successful conventional gas wells drilled and connected 5-18 5.16 Conventional gas well connections, 2007, by modified PS AC area 5-19 5.17 Initial operating day rates of connections, 2007, by modified PSAC area 5-19 5.18 Marketable gas production by modified PSAC area 5-20 5.19 Conventional marketable gas production and number of producing gas wells 5-21 5.20 Number of producing gas wells (conventional) in Alberta by modified PSAC area 5-21 5.21 Average day rates of producing gas wells by modified PSAC area 5-22 5.22 Natural gas well productivity in 2007 5-22 5.23 Raw gas production by connection year 5-23 5.24 Raw gas production of sweet and sour gas 5-23 5.25 Comparison of natural gas production 5-24 5.26 Average initial natural gas well productivity in Alberta 5-25 5.27 Alberta natural gas well activity and price 5-26 5.28 Conventional marketable gas production 5-27 5.29 Gas production from bitumen upgrading and bitumen wells 5-27 5.30 Total gas production in Alberta 5-28 5.3 1 Alberta natural gas storage injection/withdrawal volumes 5-29 5.32 Commercial gas storage locations 5-30 5.33 Major gas pipelines in Canada and Alberta export points 5-3 1 5.34 Alberta marketable gas demand by sector 5-32 5.35 Historical volumes "available for permitting" 5-33 5.36 Purchased natural gas demand for oil sands operations 5-33 5.37 Gas demand for bitumen recovery and upgrading 5-34 5.38 Total purchased process and produced gas for oil sands production 5-35 5.39 Total marketable gas production and demand 5-36 6 Natural Gas Liquids 6-1 6.1 Reserves of Natural Gas Liquids 6-1 6.1.1 Provincial Summary 6-1 6.1.2 Ethane 6-2 6. 1 .3 Other Natural Gas Liquids 6-3 6.1.4 Ultimate Potential 6-4 6.2 Supply of and Demand for Natural Gas Liquids 6-4 6.2. 1 Supply of Ethane and Other Natural Gas Liquids 6-4 6.2.2 Demand for Ethane and Other Natural Gas Liquids 6-8 Tables 6. 1 Established reserves and production of extractable NGLs as of December 3 1 , 2 007 6-1 6.2 Reserves of NGLs as of December 31,2007 6-2 6.3 Ethane extraction volumes at gas plants in Alberta, 2007 6-6 6.4 Liquid production at ethane extraction plants in Alberta, 2007 and 201 7 6-6 Figures 6. 1 Remaining established NGL reserves expected to be extracted from conventional gas and annual production 6-2 6.2 Remaining established reserves of conventional natural gas liquids 6-3 6.3 Schematic of Alberta NGL flow 6-5 6.4 Ethane supply and demand 6-8 6.5 Propane supply from natural gas and demand 6-9 6.6 Butanes supply from natural gas and demand 6-10 (continued) ERCB ST98-2008: Alberta's Energy Reserves 2007 and Supply/Demand Outlook / C ontents • v 6.7 Pentanes plus supply from natural gas and demand for diluent 6-1 1 7 Sulphur "7-1 7. 1 Reserves of Sulphur ^' ^ 7.1.1 Provincial Summary 7" 1 7. 1 .2 Sulphur from Natural Gas 7-1 7. 1 .3 Sulphur from Crude Bitumen ^"2 7. 1 .4 Sulphur from Crude Bitumen Reserves Under Active Development 7-2 7.2 Supply of and Demand for Sulphur 7-4 7.2.1 Sulphur Supply 7-4 7.2.2 Sulphur Demand 7-6 Tables 7. 1 Reserves of sulphur as of December 3 1 , 2 007 7-1 7.2 Remaining established reserves of sulphur from natural gas as of December 31, 2007 7-3 Figures 7. 1 Sources of sulphur production 7-4 7.2 Sulphur production from gas processing plants in Alberta 7-5 7.3 Sulphur production from oil sands 7-5 7.4 Canadian sulphur offshore exports 7-6 7.5 Sulphur supply and demand in Alberta 7-7 8 Coal 8-1 8.1 Reserves of Coal 8-1 8.1.1 Provincial Summary 8-1 8. 1 .2 Initial in-Place Resources 8-2 8. 1 .3 Reserves Methodology 8-2 8. 1 .4 Ultimate Potential 8-4 8.2 Supply of and Demand for Marketable Coal 8-4 8.2.1 Coal Supply 8-5 8.2.2 Coal Demand 8-7 Tables 8. 1 Established initial in-place resources and remaining reserves of raw coal in Alberta as of December 3 1 , 2 007 8-2 8.2 Established resources and reserves of raw coal under active development as of December 31, 2007 8-3 8.3 Ultimate in-place resources and ultimate potentials 8-4 8.4 Alberta coal mines and marketable coal production in 2007 8-6 Figures 8. 1 Producing coal mines in Alberta 8-5 8.2 Alberta marketable coal production 8-6 9 Elecfricity 9-1 9. 1 Electricity Generating Capacity 9-2 9.1.1 Provincial Summary 9-2 9. 1 .2 Elecfricity Generating Capacity by Fuel 9-5 9.2 Supply of and Demand for Electricity 9-6 9.2.1 Elecfricity Generation 9-7 9.2.2 Elecfricity Transfers 9-8 9.2.3 Elecfricity Demand in Alberta 9-10 9.2.4 Oil Sands Elecfricity Supply and Demand 9-12 (continued) vi • ERCB ST98-2008: Alberta's Energy Reserves 2007 and Supply/Demand Outlook / C ontents Tables 9.1 Proposed power plant additions greater than 5 MW, 2008 - 2 017 9-4 9.2 2007 electricity statistics at oil sands facilities 9-13 Figures 9. 1 Alberta electricity generating capacity 9-3 9.2 Alberta electricity generation 9-8 9.3 Alberta electricity transfers 9-9 9.4 Alberta electricity consumption by sector 9-10 9.5 Alberta oil sands electricity generation and demand 9-12 Appendix A Terminology, Abbreviations, and Conversion Factors Al 1 . 1 Terminology A 1 1.2 Abbreviations A8 1.3 Symbols A9 1 .4 Conversion Factors A9 Appendix B Summary of Crude Bitumen, Conventional Crude Oil, Coalbed Methane, and Natural Gas Reserves Al 1 B. 1 Initial in-place resources of crude bitumen by deposit All B.2 Basic data of crude bitumen deposits A12 B.3 Conventional crude oil reserves as of each year-end A17 B.4 Conventional crude oil reserves by geological period as of December 31, 2007 A18 B.5 Distribution of conventional crude oil reserves by formation as of December 31,2007 A19 B.6 Upper Cretaceous and Mannville CBM in-place and established reserves, 2006, deposit block model method A20 B.7 Noncommercial CBM production, 2006, production extrapolation method — other CBM areas A22 B.8 Summary of marketable natural gas reserves as of each year-end A23 B.9 Geological distribution of established natural gas reserves, 2007 A24 B.IO Natural gas reserves of retrograde pools, 2007 A25 B.l 1 Natural gas reserves of multifield pools, 2007 A27 B.12 Remaining raw ethane reserves as of December 31, 2007 A30 B.l 3 Remaining established reserves of natural gas liquids as of December 31, 2007 A32 Appendix C CD — Basic Data Tables A35 Appendix D Drilling Activity in Alberta A41 D.l Development and exploratory wells, 1972-2007, number drilled annually A41 D.2 Development and exploratory wells, 1972-2007, kilometres drilled annually A42 ERCB ST98-2008: Alberta's Energy Reserves 2007 and Supply/Demand Outlook / C ontents • vii Digitized by the Internet Archive in 2015 https://archive.org/details/supplydeniandoutlook2007