Oil analysts expect Canadian crude oil supply to jump by one million barrels per day in the next 14 years — even as prices remain near the lowest they've been in two years.
The Canadian Association of Petroleum Producers (CAPP) released a report Thursday in which it projects that Canadian crude oil production will total 4.93 million barrels per day by 2030.
That's an increase of about 28 per cent, or 1 million barrels per day over 2015 levels (3.85 million b/d).
But that represents a lower estimate than previous years. CAPP projected last year that 2030 production levels would be 400,000 million barrels per day more than what it thinks they will be now.
The association attributed the new estimates to lower production in conventional oil wells, as well as from mining and in-situ projects.
And it was anything but optimistic about any new projects happening in the near future.
"The timing for the startup of oilsands projects in the future have been deferred in consideration of the weaker price environment," the report said.
The Suncor oilsands tailings pond at their tar sands operation north of Fort McMurray, Alta. on Nov. 3, 2011. (Photo: Todd Korol/Reuters)
CAPP used the report to argue for more pipeline infrastructure to move product to overseas markets.
Canada's pipeline network can currently handle approximately 4 million barrels per day, and last year production averaged 3.89 million barrels per day. But CAPP sees supply growing by over 700,000 barrels per day from 2021 to 2030, meaning the existing pipeline network couldn't handle the increased production.
"This means Canada's oil supply will soon greatly exceed its current pipeline capacity," it said.
There are three pipeline projects that oilsands operators hope to realize: Enbridge's Northern Gateway project, which could carry 500,000 barrels per day, and was approved by the federal government in 2014; the expansion of Kinder Morgan's TransMountain pipeline, which would increase its capacity from 300,000 to 850,000 barrels per day (and which is National Energy Board-approved); and Energy East, which would carry 1.1 million barrels per day.
All three projects have proven controversial.
Prime Minister Justin Trudeau said two months ago his government supports pipelines, but it does not support the current Northern Gateway route, which would run from the oilsands, across northern B.C. to a port in Kitimat.
Map of the proposed Northern Gateway pipeline. (Photo: Enbridge)
Meanwhile, the Kinder Morgan project, which would expand a pipeline that runs from the oilsands to a port in Burnaby, B.C., is facing a legal challenge from Vancouver Mayor Gregor Robertson to block its construction.
Energy East, which would run from the oilsands to a port in New Brunswick, has been formally opposed by the Assembly of First Nations in Quebec-Labrador.
But CAPP President and CEO Tim McMillan insists that Canada needs these projects.
"The need to build new energy infrastructure within Canada is clearly urgent," he said.
"New pipelines will deliver more Canadian energy to Canadians, build our country's economic prosperity and help Canada meet the world's growing energy needs."
CAPP sees crude demand increasing from China and India by 10.8 million barrels per day by 2040 — an amount "equal to almost 84 per cent of total world oil demand increase in 2040 from 2014," the report said.
But Keith Stewart, a campaigner with Greenpeace Canada, told The Globe and Mail that such growth would not help Canada meet its goal to reduce greenhouse gas emissions (GHG) by 30 per cent below 2005 levels in 2030.
"I can understand why oil companies want Canadians to believe our energy future is tied to what they are selling," he said. "But our governments should acknowledge that there is no market for this additional high carbon oil in a world that is acting on climate change."
Oil prices have rebounded somewhat after West Texas Intermediate fell to a low of $27 per barrel in January, for the first time in 13 years, according to CNBC.
"The need to build new energy infrastructure within Canada is clearly urgent."
They have since rebounded to about $50 per barrel, although even that's not enough to spur investment in Canada's energy sector, Royal Bank of Canada president and CEO Dave McKay told BNN.
He said the price of oil is dragging on Canada's economy.
"It's having a more profound effect on the Canadian economy than we would have expected," he told the network. "It's constraining growth not just in Alberta, but nationally as well.'
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