Oil sands to drive Canadian production growth to 2030, CAPP says
CALGARY, Alberta -- Canadian oil production is projected to grow steadily by an annual average of 4% -- or 175,000 bpd -- over the period to 2030 as companies continue to develop the oil sands in response to strong demand indications from North American and global energy markets.
According to the Canadian Association of Petroleum Producers’ (CAPP) 2014 Crude Oil Forecast, Markets and Transportation, total Canadian crude oil production will increase to 6.4 MMbpd by 2030 from 3.5 MMbpd in 2013.
“Global demand for oil continues to increase and Canada’s large reserves make it an attractive supply source for markets in the United States and beyond,” said CAPP V.P. Greg Stringham. “Connecting Canadian supplies to these markets, safely and competitively, remains a key priority for our industry.”
As oil production increases, more transportation capacity is required to transport products to new and existing markets. Several projects are at various stages in the regulatory process and others are being considered. They include pipelines to the east and west in Canada and south to the U.S. The projected growth in production is dependent on expansion of transportation capacity to a portfolio of market opportunities.
While pipelines remain the primary transportation mode for large crude oil volumes over long periods of time, delay in the regulatory process for Keystone XL has provided the impetus for additional capacity from railways, barges, and tankers in the transportation mix. With the construction of new loading and unloading facilities, existing rail lines provide flexibility to deliver to multiple destinations.
Over the full forecast period to 2030, oil sands remain the primary growth driver with production growth to 4.8 MMbpd. Conventional oil production in Western Canada, including condensates, remains stable at 1.5 MMbpd and Eastern Canadian offshore production declines to about 90,000 bpd.
Conventional oil production continues to reverse its previous long decline because of the continuing use of horizontal and multi-fracturing drilling techniques. Increased drilling in liquids-rich areas has also reversed a declining production trend for condensates. In Eastern Canada, three recent discoveries in the Flemish Pass basin may lead to increased projections for the region in future CAPP forecasts.
For comparison, CAPP’s 2013 forecast estimated total production in 2030 at 6.7 MMbpd, oil sands production at 5.2 MMbpd, and conventional production at 1.4 MMbpd.
During the early part of the forecast period the two forecasts are very similar, with production from current projects and projects under construction being relatively firm. However, the latter part of the forecast is more dependent on new growth projects. While the overall trends in the two forecasts are consistent, the difference between the two forecasts later in the period primarily reflects increasing uncertainty regarding project timing related to cost competitiveness and capital availability. These impacts are more evident in proposed oil sands projects near the end of the forecast period.