Natural Gas Demand

Demand

In 2024

Demand for natural gas in Alberta increased by 3.3% from 2023, accounting for 62% of marketable production volumes (194.3 million cubic metres per day 10⁶ m³/d or 69 billion cubic feet per day [Bcf/d]). 

In 2024, residential natural gas demand increased by 9.2%, and commercial use by 16%. Natural gas demand for electricity generation grew by 4.7%. An increasing population and low gas prices boosted demand in these sectors. Natural gas demand for transportation grew by 3.4% and for oil sands by 0.8%.

Base Case Forecast for 2025 to 2034

Total domestic demand for natural gas in Alberta is estimated to reach 220.1 10⁶ m³/d (7.8 Bcf/d) by 2034, growing at an average annual rate of 1%. This growth rate is slower than the previous decade, where demand increased by an annual average of 3%.

The following sectors are anticipated to have an increased demand for gas over the forecast period:

• Oil sands demand is expected to grow by 22%, driven by increased demand from oil sands in situ operations. 
• Electricity generation is expected to grow by 16%, driven by increases in cogeneration at oil sands facilities and rising demand for power generation. 
• Other sectors combined (residential, commercial, non-oil sands industrial, and transportation) will account for the remaining growth in demand. Total demand in these sectors is expected to increase at an average annual rate of about 0.7%, driven by economic and population growth and partially offset by energy efficiency gains. 
• Power generation and natural gas infrastructure to fuel new data centers may significantly increase domestic natural gas demand and will be considered in the future. 

Removals

In 2024

Natural gas removals from Alberta (i.e., transfers to other provinces and exports to the U.S.) decreased by 4.4% in 2024, caused by a growth in domestic demand offsetting a decline in demand from the U.S. over the year. Natural gas removals are equal to the difference between Alberta's marketable gas production and Alberta's natural gas demand and may include changes to storage.

Base Case Forecast for 2025 to 2034

Removals are estimated to decrease over the forecast period to 110 10⁶ m³/d (3.9 Bcf/d) by 2034, declining at an average rate of 1% annually. This decrease in removals will occur as demand growth is forecast to outpace production growth. Moreover, domestic demand for natural gas is expected to increase as the province will likely increase its consumption as a transition fuel to a low-carbon economy.

Completing pipelines like the Coastal Gaslink has enhanced the market accessibility of natural gas from Western Canada. Alberta's natural gas is poised to compete for pipeline capacity amid increasing production from British Columbia, where producers stand to gain significantly from increased liquefied natural gas (LNG) export ventures. The anticipated rise in LNG exports and overall improvement in market accessibility are expected to benefit Alberta producers by alleviating infrastructure congestion and enhancing commodity pricing.

Learn more about natural gas pipelines in Alberta in the Pipelines section.

One-Year Tariff Scenario (Tariff Case)

Demand

Tariffs and retaliatory tariffs can lead to overall economic slowdown in Alberta. Increased business operating costs will erode profit margins, reducing natural gas demand. Compared with the base case, the forecasted drop in demand is primarily due to a decline in natural gas consumption in the oil sands sector, which holds the largest share of domestic demand. However, rising electricity consumption and sustained natural gas demand in the residential and commercial sectors driven by population growth would keep the forecast comparable to the base case. By the end of the forecast period, 2034, natural gas demand is expected to reach 217 10³ m³/d (7.7 Bcf/d), a 1.4% decrease from the base case.

Removals

Under this scenario, Alberta’s natural gas removals are expected to be lower due to discounted prices and worsened competitiveness. The U.S., the primary export market, can increase its production and replace Alberta’s natural gas. A greater drop in Alberta’s production compared with its demand would lead to reduced removals in the tariff case.  However, Canada’s new LNG projects and changing trade patterns will significantly lessen the reliance on the U.S. market. Removals will reach 105.3 10³ m³/d (3.7 Bcf/d) in 2034, 4% lower than the base case.