The Canadian Association of Petroleum Producers (CAPP) has released a report on the state of the Canadian petroleum industry, which has called for the urgent construction of new pipelines.
The CAPP report, 2017 Crude Oil Forecast, Markets and Transportation, stated that Canada desperately needed more pipelines to be built before 2030 to transport the expected 1.3 million additional barrels of oil sands production to North America and around the world.
It said the overall Canadian oil production will grow to 5.1 million b/d in 2030, up from 3.85 million b/d in 2016, driven by a 53 percent increase in forecasted oil sands production of up to 3.7 million b/d in 2030 from 2.4 million b/d in 2016.
Conventional oil production is expected to remain flat, producing 884,000 b/d on average during the period; Canada’s current pipeline network has the capacity to transport 4 million b/d of oil and oil products.
Based on these projections the growth will exceed the existing capacity, which the CAPP said highlighted the urgent need for new pipelines heading north, east, south and west.
“The urgent need for new pipelines to increase our competitiveness continues to be one of the biggest challenges facing our industry,” said CAPP President and CEO Tim McMillan.
“Without access to emerging new markets, we’re putting our economy at risk.
“It is imperative we get our oil to markets in all directions to ensure fair market value for our natural resources, and provide the world with a source of safe, reliable, and secure energy from Canada.
“Canadian oil producers continue to face a number of challenges such as industry competitiveness, regulatory uncertainty, and low commodity prices, in addition to the lack of access to new markets.
“The success of Canada’s energy future relies on the ability to overcome these challenges.
“Innovation and leading-edge technology in the oil sands – through initiatives such as Canada’s Oil Sands Innovation Alliance – will allow Canada to become a global leader in producing energy for a growing world with less impact on the planet.
“Canada’s ability to produce oil responsibly and sustainably positions us as a global leader.
“Our world-class regulatory system guarantees we meet stringent standards exceeding other producing nations.
The CAPP report also said that Canada’s oil industry faces a number of challenges to the prospects of long-term growth, including uncertainty related to provincial and federal climate change policies in Canada, potential protectionist policies in the US, and diverging regulatory efficiencies between the two countries.
It said pipeline constraints continued to be one of the biggest challenges facing the industry; however, new pipelines approved with the last year such as the Trans Mountain Expansion Project, Enbridge Line 3, and Keystone XL would provide a much-needed increase to capacity into the North American and Asian markets.
It highlighted Energy East as one project which is still required to connect Canada’s growing supplies to diverse markets, including those in Europe.
For more information visit the CAPP website.
