The country’s total oil production is expected to take a significant leap in the next two decades.
That’s according to the Canadian Association of Petroleum Producers who said Tuesday, total production should increase by 1.4 million barrels per day by 2035.
However, CAPP points out our inability to get major pipelines built such as Energy East, Northern Gateway or Pacific NorthWest LNG – has dissipated investor interest in Canada’s energy sector.
CAPP President and CEO Tim McMillan says without projects like Trans Mountain, or access to global markets, it’s difficult for producers to ensure resources get a fair market value.
“Canada is falling behind its competitors, losing the opportunity to supply the world with oil produced the Canadian way. The U.S. is increasing its oil exports to the same emerging markets Canada is targeting.”
There is optimism in the potential of the liquids-rich Montney and Duvernay formations in Western Canada – which could contribute up to 500,000 barrels of pentanes and condensates per day by 2026.
CAPP’s report shows about 99 per cent of Canada’s exports are shipped to the United States – with less than one per cent exported overseas.
Between 2008 to last year, the U.S. increased oil production by 87 per cent and capital spending increased 38 per cent in 2017 to about $120 billion.
In contrast, Canada’s capital spending has declined 47 per cent since between 2014 and 2017 to $43 billion.
McMillian says the decrease is due to Canada falling behind its competitors and losing out on emerging markets like China.
“Canadian production is forecast to rise to 5.6 million bpd and yet we do not have the means of getting it to new, global markets.”
McMillian says despite this, he’s fully supportive of the Federal government’s push to ensure construction of Trans Mountain gets underway.
“In 2014, production and capital investment were high in Canada’s oil industry. By removing regulatory barriers and increasing pipeline capacity, we can clear the path for a healthy energy sector and be successful once again.”
Oil sands production in Canada increased from around 2.6 million bpd in 1998 to 4.2 million by 2017.