Canadian Oil Industry Sees Biggest 2-Year Spending Collapse On Record

$50 billion in annual spending has disappeared.

The Canadian Press CP

CALGARY — Canada's oil and gas sector is on track to have the biggest two-year decline in capital spending in its history.

The industry's main association says spending on major projects is forecast to drop to $31 billion in 2016.

That's down $50 billion or 62 per cent since 2014, when the industry set a record of $81 billion.

The Canadian Association of Petroleum Producers says that's the biggest drop in records going back to 1947.

"The world will require responsibly produced energy for a long time to come."

CAPP's members produce about 90 per cent of Canada's natural gas and crude oil. Prices for crude have plunged worldwide since late 2014 due to a prolonged oversupply amid soft economic growth and a political push to use less fossil fuels.

The association's president is calling for Canada, as a country, to take action so the industry can compete globally.

"Times are tough today in Canada's oil and natural gas sector, but the world will require responsibly produced energy for a long time to come," said Tim McMillan, CAPP president and chief executive officer.