Natural Gas

Updated June 2025

Within this section

Highlights

Production

Although natural gas prices were lower during 2024, production of marketable natural gas was 315.7 million cubic metres per day (106 m3/d) or 11.2 billion cubic feet per day. This volume was a marginal increase from 2023 production driven by higher shale gas and gas production from oil wells. Conventional and coalbed methane production volumes, however, remained similar to 2023.

By 2034, marketable production is anticipated to grow to 330.1 106 m3/d (11.7 Bcf/d). Increasing output from the Petroleum Services Association of Canada (PSAC) areas of Foothills Front Northwestern Alberta, and shale is expected to outweigh decreasing production in other parts of the province.

Number of wells 

The number of new wells placed on production in 2024 decreased by 12.1% to 810. A significant decline in natural gas prices and higher inventories in 2024 resulted in fewer new wells placed on production. 

The number of new wells each year is expected to increase over the forecast period. By 2034, 1130 new gas wells are expected to be placed on production in the base case. Most of the new wells will be horizontal multistage fractured wells targeting high-productivity, liquids-rich formations in the western regions of Alberta (Foothills Front and Northwestern Alberta) and shale gas.

Demand

Alberta’s demand for natural gas was estimated at 194.3 106 m3/d (6.9 Bcf/d) in 2024 (about 62% of marketable gas production). Demand in 2024 increased by 3.3% from 2023, partly due to higher residential and commercial sector demand.

Alberta’s gas demand in the base case is forecast to be around 67% of its marketable gas production in 2034. Demand is anticipated to increase by 13.3% by 2034, with growth primarily expected from the oil sands, electricity generation, residential and commercial sectors.

Tariff Scenarios

Because of significant uncertainty, particularly regarding U.S. tariff policies, this year’s report examines two scenarios: a short-term tariff uncertainty scenario (base case) and a one-year tariff scenario (tariff case). The primary difference between these scenarios lies in their tariff assumptions.

  1. Base case: This scenario assumes business as usual and no tariffs. However, the U.S. tariff threats on energy products (oil and gas) persist throughout the first half of 2025 but are ultimately averted through diplomatic negotiations by midyear. Consequently, energy supply and demand are minimally affected.
  2. Tariff case: This scenario assumes a 10% U.S. tariff on energy products (oil and gas) and 25% tariffs on other Canadian goods imposed in the first half of 2025 despite diplomatic efforts. This scenario includes subsequent U.S. and Canadian retaliatory tariffs, other nontariff measures1, and additional U.S. tariffs on other trading partners. All tariffs and nontariff measures between Canada and the United States persist until the end of the first quarter of 2026 before mostly being phased out as the review or renegotiation of the Canada-United States-Mexico Agreement. It is expected tariffs will have some long-term effects and structural changes to the global economy (changes in trade and investment flows).

These tariff assumptions affect prices, costs, commodity profitability, investment, supply and demand, project risk factors, and commercial start dates (where applicable) for most chapters of the report, including comparisons of the outcomes of these scenarios. 

1Nontariff measures can include quotas or restrictions on imported goods (i.e., liquor), export taxes on electricity, and changes in consumer and business behaviour (i.e., buying Canadian).