The Canadian Association of Petroleum Producers is slightly increasing its oil production forecast for the country.
Canadian oil production is expected to grow to 5.1 million barrels per day in 2030, up from 3.85 million barrels per day in 2016, according to CAPP’s 2017 Crude Oil Forecast released Tuesday.
The report notes this will be driven by a 53 per cent increase in oilsands production in Alberta.
CAPP President and CEO Tim McMillan tells Mix News while we continue to see growth in production, capital expenditure in the oilsands is at its lowest since 2009.
“That was the global financial crisis. If we take that year out, we have to go back over a decade to see capital investment in Fort McMurray projects lower than it is today.”
CAPP also projects production growth will start to slow down as projects finish construction and begin producing oil. McMillan says we’re not seeing new projects move forward at the same pace as the country has gotten used to, because global and long cycle spending is coming back, but not in Canadian oilsands as much as other places.
“Some of that is uncertainty around climate regulation and policy in Canada. Some of that is trade related with the changes in the U.S. and some of that is policy and regulatory in the U.S. We were partnered with them on methane changes then the U.S. said they’re aren’t doing that. We’ve raised corporate taxes in Canada both provincially and nationally, the U.S. today is looking at lowering them. All those pieces are driving investment to the U.S.”
About 99 per cent of Canadian exports, over 3.3 million barrels per day in 2016, was exported to the U.S., while less than one per cent was shipped overseas, according to the report.
Meanwhile, McMillan says the forecasted oil production growth drives the need for more pipelines as we’re currently at full capacity on the pipes and are using more rails.
“With Keystone, Line 3 and Kinder Morgan we will need all three of them in place by 2030 to take on the new growth.”
CAPP’s forecast was based on data collected from producers in March and April and uses a methodology that accounts for historical and future capacities.