NEB expects Canadian market to seek continuing growth

CALGARY , Oct. 22 /CNW/ - In a report released today, the National Energy Board (NEB) projects that during the next decade, interest in additional energy infrastructure could be significant, as determined by the dynamic supply and demand trends of energy markets.

According to "Canada's Energy Future - Infrastructure Changes and Challenges to 2020", an NEB Energy Market Assessment based on the supply and demand forecasts presented in the "2009 Reference Case Update", it is anticipated that the market will seek approval for new energy infrastructure to meet evolving North American requirements for energy.

"In the last decade, rising crude oil prices, robust global crude oil demand and oil sands growth have resulted in applications to expand existing crude oil pipelines and to construct new ones," said NEB Chair, Gaétan Caron. The current capacity is expected to increase between late 2009 and mid-2010 with two newly approved major pipeline systems: the Keystone and the Alberta Clipper Pipelines.

The Keystone pipeline will add 69 000 m(3)/d (435 Mb/d) and the Alberta Clipper will add 71 400 m(3)/d (450 Mb/d) of incremental capacity. Scheduled for late 2010, the Keystone Expansion and Cushing Extension will add an incremental 24 800 m(3)/d (156 Mb/d) of pipeline capacity.

Altogether, this will provide 165 200 m(3)/d (1.0 MMb/d) of additional pipeline capacity out of Western Canada . While this new capacity has targeted traditional U.S. markets, current trends suggest that potential pipeline projects beyond 2012 could shift to markets such as the U.S. Gulf Coast and Asia.

The natural gas supply picture is anticipated to change by 2020 with declining conventional production being offset by tight gas, shale gas, coalbed methane and frontier supplies. Some of these, especially the shale gas developments are located in new regions which would require infrastructure to connect to markets.

Canadian gas markets are changing as well. In Western Canada , technological developments will result in each barrel of oil produced from the oil sands to require progressively less energy. Gas demand is expected to rise in keeping with the overall volume of oil produced.

Natural gas-fired power generation is expected to increase significantly from 50 809 GW.h in 2008 to 82 670 GW.h in 2020, requiring access to additional gas supply and improved flexibility through greater storage and service enhancements in order to meet the variable demand of the electricity market.

As provinces and states make progress towards fulfilling renewable portfolio standards and emissions reduction goals, major electricity projects requiring international infrastructure could be proposed. There could also be a need identified for new transmission facilities as aging infrastructure and the need to ensure a reliable and affordable supply of electricity becomes an increasing concern.

The industry has identified a multitude of such potential projects totaling thousands of kilometers of high voltage transmission lines. While not likely that all proposals would go ahead, the projects considered in this report would increase electricity export capacity across the country by 12 000 megawatts -- about two-thirds of which would be in Western Canada .

Celebrating 50 years of regulatory leadership, the NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest, within the mandate set by Parliament in the regulation of pipelines, energy development and trade. As part of its mandate, the NEB monitors the supply of all energy commodities in Canada and reports its findings. The NEB Internet site is regularly updated with new energy information for the Canadian public.

This news release, the Energy Market Assessment entitled Canada's Energy Future - Infrastructure Changes and Challenges to 2020, and Questions and Answers are available on the Board's Internet site at www.neb-one.gc.ca under What's New!

For further information: Carole Léger-Kubeczek, Communications Officer, Email: [email protected], Telephone: [phone]; For a copy of the Energy Market Assessment entitled Canada's Energy Future - Infrastructure Changes and Challenges to 2020: National Energy Board, Library, Telephone: [phone], Email: [email protected]