CALGARY – The low price of crude today is expected to put a damper on Canada’s oil output 15 years from now, according to a new forecast by the Canadian Association of Petroleum Producers.
CAPP predicts the country’s total daily oil production will hit 5.3 million barrels by 2030 — a 43 per cent increase over 2014 levels.
But that’s 17 per cent less than what the association predicted a year ago when crude was above US$105 a barrel. Right now, it’s around US$60 a barrel.
The 2014 and 2015 forecasts follow a similar trajectory for most of the forecast period, but diverge in later years.
No big change is expected for oilsands projects that are up and running or under construction, but some longer-term projects have been shelved due to the price uncertainty.
Oilsands production alone is expected to hit four million barrels a day by 2030, nearly doubling from 2014 levels. But a year ago, CAPP was predicting oilsands output of 4.8 million barrels a day by 2030.
Through 2019, CAPP sees the oilsands adding an average of 168,000 barrels a day of production each year. But during the last decade of its forecast, the pace slows to about 86,000 barrels a day of annual growth.
Greg Stringham, CAPP’s vice-president of oilsands and markets, said new pipelines to the East, West and U.S. Gulf Coasts will be necessary, despite the slower growth.
“By the end of our forecast…all of the proposed pipeline systems do become used. And from that perspective, it didn’t really change that outlook when many people would have been looking at it saying ‘Well, it’s a slower pace. We may not need all that (pipeline space).’”
Crude-by-rail will also continue to be an important way to transport “swing supply” to get crude to markets that aren’t served by pipelines, said Stringham.
The group surveyed its members in March and April of this year about their investment plans.
Total investment across the oil and gas industry is predicted to come in at $45 billion in 2015, down nearly 40 per cent from last year. In the oilsands, capital investment is seen dropping by nearly a third.
Stringham said there is some upside to developing Canada’s resources at a more moderate clip.
“The slower pace does mean that there is some additional labour availability. Some projects have been coming in on time and on budget. The last eight that I’ve seen have done that,” he said.
“From that perspective, I think it does help on the competitiveness side of things.”
Greenpeace campaigner Keith Stewart said it’s “remarkable” that CAPP predicted a huge rise in oilsands production the day after G7 leaders agreed to shift to a no-carbon economy by the end of this century.
“They need to be planning how they can become renewable energy companies, not doubling down on high-carbon oil.”
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