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Alberta

25 facts about the Canadian oil and gas industry in 2023: Facts 11 to 15

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From the Canadian Energy Centre

One of the things that really makes us Albertans, and Canadians is what we do and how we do it.  It’s taking humanity a while to figure it out, but we seem to be grasping just how important access to energy is to our success.  This makes it important that we all know at least a little about the industry that drives Canadians and especially Albertans as we make our way in the world.

The Canadian Energy Centre has compiled a list of 25 (very, extremely) interesting facts about the oil and gas industry in Canada. Over the 5 days we will post all 25 amazing facts, 5 at a time. Here are facts 11 to 15. 

The Canadian Energy Centre’s 2023 reference guide to the latest research on Canada’s oil and gas industry

The following summary facts and data were drawn from 30 Fact Sheets and Research Briefs and various Research Snapshots that the Canadian Energy Centre released in 2023. For sources and methodology and for additional data and information, the original reports are available at the research portal on the Canadian Energy Centre website: canadianenergycentre.ca.

11. Breakeven costs in Canadian natural gas sector fifth lowest in the world

The Canadian natural gas sector had a weighted average breakeven gas price of US$2.31 per thousand cubic feet (mcf) in 2022, fifth lowest among major natural gas producing countries. Only in Saudi Arabia (US$1.09 per mcf), Iran (US$1.39 per mcf), Qatar (US$1.93 per mcf), and the United States (US$2.22 per mcf) was the breakeven gas price lower. The weighted average breakeven costs for Canada‘s natural gas sector in 2022 were lower than in Russia, Norway, Algeria, China, and Australia.

Source: Derived from Rystad Energy

12. Natural gas prices have skyrocketed

Natural gas prices have skyrocketed around the world in the last two years. In 2021, the price of natural gas in Asia was US$18.60 per million British thermal units (mmbtu) compared to US$4.40 per mmbtu in 2020—an increase of 323 per cent in just one year. By comparison, in 2021 natural gas sold for US$2.80 per mmbtu on Alberta’s AECO-C trading hub; in Asia it was US$15.88 per mmbtu more (or 564 per cent higher). Between 2019 and 2021, the price gap between Henry Hub in the US and AECO-C natural gas fluctuated from a high of 98 per cent in 2019 to a low of 26 per cent in 2020. In 2021, U.S. natural gas sold for US$3.84 per mmbtu, 40 per cent higher than the US$2.75 per mmbtu average price for AECO-C natural gas that year.

Sources: BP Statistical Review of World Energy and International Monetary Fund

13. Projected government revenues from the Canadian natural gas sector: over US$227 billion through 2050

Government revenues from the Canadian natural gas sector are projected to reach over US$227 billion through 2050. Under a Henry Hub price for natural gas of US$3.00 per thousand cubic feet (kcf), government revenues from the country’s natural gas sector are expected to rise from US$1.4 billion in 2023 to US$3.4 billion in 2050. Should the Henry Hub price reach US$4.00 per kcf, government revenues from the country’s natural gas sector would be projected to rise from US$2.0 billion in 2023 to US$10.0 billion in 2050.

Source: Derived from Rystad Energy

14. Small business plays a key role in the oil and gas sector

Small business plays a key job creation role in Canada’s economy. Statistics Canada defines small businesses as those with between one and 99 paid employees. Medium-size enterprises are those with 100 to 499 employees, while large enterprises have 500 or more employees. In 2022, of the oil and gas firms in Canada, 96.0 per cent were small, 3.5 per cent were medium-sized, and 0.6 per cent were large companies.

With the exception of construction, the oil and gas sector in Canada has a higher proportion of small businesses than other major industries. As of 2022, 96.0 per cent of all oil and gas energy firms had between 1 and 99 employees compared with 93.2 per cent in manufacturing, 89.6 per cent in utilities, and 99.0 per cent in the construction sector. The all-industry average is 98.0 per cent.

Source: Authors’ calculation based on Statistics Canada Table 33-10-0661-01

15. Canada’s oil and gas sector has an impact on key industries across the Canadian economy

In 2019, the activities of the Canadian oil and gas sector were indirectly responsible for significant portions of the GDP created by other key industries across Canada. The sector’s activities generated $100.9 million in GDP in the food and beverage merchant wholesalers industry that year and nearly $4.1 billion in GDP in architectural, engineering, and related services. In 2019, the top five industries whose GDP was most affected by their association with Canada’s oil and gas sector included:

  • Architectural, engineering, and related services: $4.1 billion
  • Machinery, equipment, and supplies merchant wholesalers: $3.4 billion
  • Banking and other depository credit intermediation: $2.1 billion
  • Computer systems design and related services: $1.7 billion
  • Electrical power generation, transmission, and distribution: $1.5 billion
Source: Statistics Canada

CEC Research Briefs

Canadian Energy Centre (CEC) Research Briefs are contextual explanations of data as they relate to Canadian energy. They are statistical analyses released periodically to provide context on energy issues for investors, policymakers, and the public. The source of profiled data depends on the specific issue. This research brief is a compilation of previous Fact Sheets and Research Briefs released by the centre in 2023. Sources can be accessed in the previously released reports. All percentages in this report are calculated from the original data, which can run to multiple decimal points. They are not calculated using the rounded figures that may appear in charts and in the text, which are more reader friendly. Thus, calculations made from the rounded figures (and not the more precise source data) will differ from the more statistically precise percentages we arrive at using the original data sources.

About the author

This CEC Research Brief was compiled by Ven Venkatachalam, Director of Research at the Canadian Energy Centre.

Acknowledgements

The author and the Canadian Energy Centre would like to thank and acknowledge the assistance of an anonymous reviewer for the review of this paper.

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Alberta

How Alberta is moving to speed up oil sands reclamation with mine water treatment

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From the Canadian Energy Centre

By Deborah Jaremko

New standards to build on rules already in place for other mining sectors

In what the former Chief of the Fort McKay First Nation calls “a critical step in the right direction,” the Alberta government is moving to accelerate reclamation of more than 1.3 trillion litres of water stored in oil sands tailings ponds.

On Sept. 5, the province announced it will expedite setting standards that allow for “mine water” to be treated and released into the environment, building on the rules that are already in place for other mining operations across Canada.

“We cannot ignore this challenge, we need to keep working together to find practical and effective solutions that protect Indigenous rights, people and the environment,” said Chief Jim Boucher, a member of Alberta’s Oil Sands Mine Water Steering Committee.

That committee is behind a suite of nine recommendations that Alberta is putting into action to improve mine water management and tailings pond reclamation.

The Mining Association of Canada (MAC) says decades of research give the industry confidence that mine water can be safely treated and released once regulations are in place.

But that will take the federal government moving faster too.

Both the federal and provincial governments play a role in potential regulations for the treatment and release of oil sands mine water.

“Alberta is proposing science-based parameters to ensure the safe return of treated water used in oil sands mining, just as other provincial governments do for their respective mining sectors,” MAC CEO Pierre Gratton said in a statement.

“We are hopeful that this will accelerate the development of federal regulations – which we requested almost 15 years ago – to be similarly advanced.”

Gratton said setting standards for safe mine water release could unlock “significant investments” in oil sands reclamation and water treatment.

What are tailings ponds?

Tailings are a byproduct of mining operations around the world.

Oil sands tailings ponds are engineered basins holding a mix of mine water, sand, silt, clay and residual bitumen generated during the extraction process. There are eight operating oil sands mines with tailings ponds in northern Alberta.

Recycling water held in these basins helps operators reduce the amount of fresh water withdrawn from the Athabasca River.

In 2023, 79 per cent of the water used for oil sands mining was recycled, according to the Alberta Energy Regulator.

What is oil sands mine water?

Oil sands mine water is water that comes into contact with the various stages of oil sands mining operations, including bitumen extraction and processing.

Tailings ponds in the oil sands also hold water from significant amounts of rain and snow collected in the decades since the first mines began operating.

While the oil sands mining sector has reduced the amount of fresh water it uses per barrel of oil produced by nearly one-third since 2013, the total volume of mine water in tailings storage has grown as production has increased.

What’s in oil sands mine water? 

The constituents of oil sands mine water requiring treatment for safe release are both typical of water in other industrial processes and unique to the oil sands sector.

MAC says common materials are suspended solids like sand, silt and clay, as well as a range of metals. These can be treated by a wide range of proven technologies already in use in Canada and globally.

Unique to oil sands mine water are organic compounds such as naphthenic acids. According to MAC, operators have demonstrated and continue to invest in processes to treat these to levels safe for environmental release.

How does mine water impact reclamation? 

At the end of an oil sands mine’s life, operators must remove all infrastructure and restore the land to features of a self-sustaining boreal forest similar to what was there before.

Addressing the challenge of tailings ponds and the mine water stored in them is critical to the overall success of oil sands mining reclamation.

Why is mine water release important?

MAC says the only way to remove mine water in tailings ponds is to treat it for safe release to the environment.

Strict regulations allow for this process across Canadian copper, nickel, gold, iron ore, and diamond mining operations. But it is prohibited in the oil sands.

The safe release of treated oil sands mine water into the environment can reduce the need to store it, minimize further land disturbance and help reclamation happen faster.

MAC says operators have shown they can treat mine water to safe release levels, using processes that include innovative technologies developed through Canada’s Oil Sands Innovation Alliance.

What is Alberta doing? 

Alberta has accepted the Oil Sands Mine Water Steering Committee’s nine recommendations aimed at speeding up solutions for safe mine water release.

The province says the recommendations, developed with input from industry, technology providers, Indigenous communities and scientists, will now be evaluated to determine how they can be put into practice.

Read the full recommendations here.

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Alberta

Premier Smith directs ministers to grow economy and create jobs

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Premier Smith has issued new mandate letters to several ministers. Minister of Jobs, Economy, Trade and Immigration Joseph Schow will push for Alberta to set its own immigration levels and expand youth job programs. Minister of Forestry and Parks Todd Loewen will strengthen wildfire protections and open more recreation opportunities. Minister of Tourism and Sport Andrew Boitchenko will expand year-round tourism and implement the Fairness and Safety in Sport Act to ensure women and girls have the opportunity to compete in biological female-only divisions. Minister of Arts, Culture and Status of Women Tanya Fir will expand Alberta Day, showcase the provincial flag more prominently, and improve supports for survivors of domestic violence.

Alberta’s Minister of Jobs, Economy, Trade and Immigration Joseph Schow, Minister of Forestry and Parks Todd Loewen, Minister of Tourism and Sport Andrew Boitchenko and Minister of Arts, Culture and Status of Women Tanya Fir have been tasked with promoting Alberta’s industries, driving investment, creating jobs and increasing prosperity for people who live in Alberta.

The new mandate letters are focused on delivering the programs and supports that matter to Albertans, Alberta companies, workers and the economy, while maintaining Alberta as the best place to live, work and raise a family.

Through the commitments outlined in each mandate letter, Alberta’s ministers will deliver results, strengthen communities and build a future rooted in prosperity, opportunity and responsible governance.

“A resilient and diversified economy is one of our top priorities and what Albertans expect from their government. We are creating the conditions for workers and industries in Alberta to keep growing – by supporting investments where they are needed and reducing barriers that stifle innovation and expansion.”

Premier Danielle Smith

 

Jobs, Economy, Trade and Immigration

The Premier tasks Minister Joseph Schow with:

  • Using every legal and policy tool to gain greater provincial authority over immigration, setting sustainable levels that prioritize economic migrants, and ensuring young Albertans have access to jobs. Expanding programs to reduce youth unemployment, developing talent pipelines and helping newcomers integrate successfully.
  • Attracting major domestic and international investment by coordinating with partners, reviewing and improving incentive programs, increasing the Investment and Growth Fund and aligning investment attraction agencies with Alberta’s long-term economic goals.
  • Defending Alberta’s interests in federal trade negotiations, implementing and managing trade agreements and supporting Alberta businesses to expand into new global markets through trade missions and services.
  • Collaborating with ministries and partners to expand airport capacity and connectivity, supporting value-added forestry initiatives, growing Alberta’s cultural industries and securing public and private investment in defense-related and other strategic infrastructure projects.

“Alberta continues to stand out as the best place to do business. Our government’s work is leading to a stronger economy, more jobs and more opportunity for those who call Alberta home. I am honoured to accept this mandate given to me by Premier Smith to continue this growth for Alberta, keeping our province strong and free.”

Joseph Schow, Minister of Jobs, Economy, Trade and Immigration

 

Forestry and Parks

The Premier tasks Minister Todd Loewen with:

  • Securing a federal partnership for wildfire mitigation on federal lands, especially in national parks, and advancing proactive fire management through strategic harvesting, fuel reduction, expanded FireSmart programs, new technology and modern firefighting equipment.
  • Finalizing and implementing the new strategy to expand public access to natural spaces responsibly, while continuing to add new campsites, trails and recreation opportunities, and upgrading infrastructure in high-traffic areas like Kananaskis, Canmore and Crowsnest Pass.
  • Remaining committed to a common-sense approach to maintain healthy wildlife populations and guide ministry practices related to fish and game management.
  • Proposing a value-added tax incentive for forestry products and enabling more public land use opportunities through private and community partnerships.

“The beautiful outdoors of our province feels like home for many Albertans. Our government is continuing its work to make sure that the land we have all grown up loving will stay strong for Albertans today and for future generations”

Todd Loewen, Minister of Forestry and Parks

 

Tourism and Sport

The Premier tasks Minister Andrew Boitchenko with:

  • Maintaining progress on expanding opportunities for sustainable year-round tourism in the Alberta Rockies with all-season resorts.
  • Ensuring the full implementation of the Fairness and Safety in Sport Act, using every legal and constitutional tool available to defend Alberta athletes and guarantee a level playing field.
  • Respecting taxpayer dollars by creating a new provincial bidding policy to oversee future bids to host international and national sport events and working with Treasury Board and Finance to ensure visitors contribute fairly to taxes and fees.
  • Continuing to work with Travel Alberta to unleash Alberta’s potential and reach the ambitious goal of $25 billion in visitor spending.

“Premier Danielle Smith has made my mandate clear; grow Alberta’s visitor economy and ensure our province continues to be the best place to live, work, visit and play. We have already had great success, and I am excited to keep that ball rolling as we work to strengthen Alberta’s tourism and sport sectors. Albertans elected us to get the job done and that’s exactly what I intend to do.”

Andrew Boitchenko, Minister of Tourism and Sport

 

Arts, Culture and Status of Women

The Premier tasks Minister Tanya Fir with:

  • Continuing to work with the Minister of Jobs, Economy, Trade and Immigration to grow Alberta’s cultural industries including music, television, film and other performing arts.
  • Maintaining progress on promoting and celebrating Alberta’s unique cultural identity and heritage, including identifying opportunities to more prominently display our provincial flag and motto across the province while significantly growing the size and scope of Alberta Day celebrations.
  • Remaining committed to collaborating with First Nations throughout the province that wish to repatriate items identified as belonging to their nations, including the implementation of the new repatriation framework.
  • In cooperation with the Minister of Children and Family Services, pushing forward on developing and implementing supports for victims of domestic violence.

“Our government has a clear vision for Alberta’s arts, culture and heritage sectors to ensure they remain central to our economy, identity and communities. Through this mandate, I will continue leading initiatives that celebrate who we are, create more opportunities in cultural industries, collaborate with First Nations partners and support survivors of gender-based violence.”

Tanya Fir, Minister of Arts, Culture and Status of Women
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