Canadian oil output up by one-third by 2030
The Canadian Association of Petroleum Producers is predicting Canadian oil production to grow by one-third to 5.1 million barrels per day (b/d) by 2030, despite decreases in capital spending.
This is the first time in four years that CAPP has raised its predictions. In 2013, the industry association predicted Canadian production would reach 6.7 million b/d.
According to the CAPP annual report, the expected increase in Canadian crude production comes mostly from the Alberta oilsands. By 2030, production from the oilsands is expected to hit 3.7 million b/d.
The projected boost in production highlights the need for pipelines to move Alberta’s crude, but so far, proposed Canadian oil pipelines have faced fierce opposition from environmental groups.
“We have been operating in a pipeline world where we have been at full capacity,” CAPP President Tim McMillan said in a conference call. “It’s like a freeway that’s always in gridlock.”
McMillan said the industry needs all the pipelines currently proposed to move Canada’s resources to tide water or US markets. These major projects, including Enbridge’s Line 3, Kinder Morgan’s Trans Mountain expansion and TransCanada’s Keystone XL and Energy; all currently sit at various stages of approval.
According to the report which is based on a survey of its members, the Canadian oil industry faces challenges including uncertainty related to climate change policies, potential US protectionist measures and the possibility of laxer regulations in the US.
Capital spending in the Canadian oilsands is expected to fall for the third consecutive year. This year, CAPP predicts oilsands companies to spend $15 billion, down from $34 billion in 2014.
According to McMillan, the drop in oilsands investment will not be seen until after 2o20 as projects have years-long cycles. Growth is forecast to slow post 2020.
The Canadian Association of Oilwell Drilling Contractors also released a report on Tuesday. The CAODC forecast 6,842 wells will be drilled this year, an increase of 2,177 from its previous prediction. The increase is due to the stabilization of oil prices.
The association is concerned about possible delays in Trans Mountain expansion construction due to a possible shakeup in the BC government should the alliance between the NDP and Green Party wield power. The two vowed to block the project if elected.
Canada is home to the world’s third-largest crude reserves.
