NEW – Federal: Canada’s Energy Regulator issues Energy Futures report

Canada’s Energy Regulator (CER) recently issued Canada’s Energy Future 2021: Energy Supply and Demand Projections to 2050 (EF2021), in which propane is highly represented.

The EF2021 explores how possible energy futures might unfold for Canadians over the long term. EF2021 considers two main scenarios, Evolving Policies and Current Policies, which are differentiated by the level of future climate action to reduce GHG emissions globally and domestically.  

Specifically, the report notes the following points about propane:

• There are various uses of propane in Canada in all sectors, and over the next few years, petrochemical demand is projected to increase with the start of the Heartland Complex.
• Propane exports to the U.S. have significantly grown this past decade as U.S. domestic demand and propane exports from the U.S. grew.
• In 2019, propane exports from the west coast of B.C. began in the form of liquefied petroleum gas (LPG). These west coast exports could continue to increase, with potential for significant additional LPG projects and exports.
• In the Current Policies Scenario, total NGL production grows 70% to 1967 Mb/d. NGL production growth is due to natural gas production growth in this scenario. However, propane and butane production declines slightly over the long-term period in the Evolving Policies Scenario. Demand for these NGLs increases in the medium term as demand from petrochemical producers in Alberta increases, which may affect export levels of propane and butane.
• Given recent export growth trends, and potential for petrochemical growth above what is projected, the Canadian propane market could see tightening in the longer term if propane production levels off then slightly declines, as projected in the Evolving Policies Scenario.
• The increased use of solvents to reduce steam requirements in the oil sands would increase demand for propane and butane and could influence how much they are targeted by future natural gas drilling.
• Over the outlook period, propane will likely be the majority of exported LPG. The amount and composition of the LPG stream exported at proposed and existing terminals could impact domestic NGL prices and the attractiveness of drilling for NGL-rich natural gas.

The CPA will continue to engage with the federal government to ensure that propane is considered a low-carbon energy source as the government increasingly pursues more stringent climate policies.

The Association also encourages members to read the report and reach out to Katie Kachur, Vice President, Government Relations for Western Canada, katiekachur@propane.ca with any questions.