Canadian oil production is set to grow by as much as one million barrels per day over the next 14 years, according to a recent report from an industry group. Reuters reports:
[Canadian Association of Petroleum Producers (CAPP)] predicted in its annual growth forecast that output will grow by 28 percent to 4.9 million barrels per day (bpd) by 2030. […]Production from Alberta’s oil sands, the world’s third-largest crude reserves and No. 1 source of U.S. oil imports, will hit 3.7 million bpd by 2030, the industry group said on Thursday. CAPP expects conventional oil production in Western Canada, including condensates, to fall to 1.1 million bpd by 2018 from 1.3 million bpd in 2015 and is expected to remain relatively stable to 2030.
These growth estimates are lower than they once were, thanks largely to the chilling effect that cheap crude prices have had on oil companies’ spending. This isn’t a problem unique to Canada, of course, but rather one that will affect projects around the world in the coming years.That said, a 28 percent increase is still a big spike upwards, and most of that growth is going to come from Albertan oil sands projects. Those operations are energy intensive, dirty, and expensive, but they’re also plumbing one of the world’s largest remaining oil fields. Oil sands producers have struggled to deal with the collapse in crude prices, but because of the scale of their operations and the time and capital costs they’ve already invested, they can’t afford to stop now.Canada will face some transportation bottlenecks as a result of its future growth in output, since its pipeline infrastructure is already running near capacity. The Trudeau Administration would be wise to start addressing this issue now, because as we saw with the Keystone XL pipeline, politics can quickly get overheated on these sorts of issues. Still, problems of abundance are the sort most countries would rather deal with.Between Canada, Mexico, and the United States, North America is looking to emerge as a 21st-century hydrocarbon-producing juggernaut.