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Oil price slide doesn't change need for pipelines: CAPP

01/21/2015 11:11 EST | Updated 03/23/2015 05:59 EDT
Even though oil prices are down and producers are cutting spending, Canada needs to get its oil to market by any means possible, says the Canadian Association of Petroleum Producers.

"No question, the effects on the industry are sharp, but we continue to need all forms of transportation in all directions — pipelines in particular — as our industry continues to grow in the years ahead," said CAPP president Tim McMillan in a statement.

Access to new markets is "critically important to improve the health, wealth, and quality of life of all Canadians," added McMillan.

Spending, production expected to decline

The industry group expects capital spending by oil producers in Western Canada to decline by 33 per cent to $46 billion in 2015, compared to $69 billion in 2014.

A number of Canadian and global oil companies have already cut spending in an attempt to cope with crude prices that have declined by about 50 per cent in the past six months.

CAPP is also cutting its growth expectations for Canadian oil production by about 65,000 barrels per day this year, and 120,000 barrels per day in 2016. It says it could revise those numbers downward again if oil prices continue to decline.

CAPP expects oil production in Western Canada to total 3.6 million barrels per day in 2015, up from 3.5 million barrels per day in 2014.

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