Industry forecast says rise in production expected to be driven largely by oilsands
Driven by growth in Alberta's oilsands, Canada's total oil production should increase to 5.6 million barrels per day by 2035 — a 33 per cent increase over 2017 levels, according to a new industry forecast.
But the report by the Canadian Association of Petroleum Producers (CAPP) also says that the country needs to become more competitive and build more pipelines if it wants to get that oil to new markets.
"We don't build freeways for traffic jams, we build them to have efficient flow of traffic," CAPP president Tim McMillan told reporters following his presentation at the Global Petroleum Show in Calgary on Tuesday.
"We should be looking at how do we reach the most profitable markets in the most efficient way possible and build the infrastructure to meet that need."
Western Canada production is forecast to account for the bulk of the country's total production, about 95 per cent.
CAPP's new report says the rise in the Canadian totals is expected to be driven largely by an increase in oilsands production — to 4.2 million b/d from 2.7 million b/d — even with a decrease in capital spending in the oilsands for the fourth consecutive year.
The industry group identified the greatest potential for growth in the Montney and Duvernay formations in the Western Canadian Sedimentary Basin, which are expected to add about 500,000 b/d of pentanes and condensates by 2026.
"When we look at Eastern Canada, we look at projects which are currently producing or those that are under construction or those that are approved," McMillan said later.
"Canada needs to improve its competitiveness and get pipelines built if it wants to transport an additional 1.5 million barrels per day (b/d) of oilsands production growth by 2035 to new emerging markets," the report says.
"A lack of competitiveness continues to be one of Canada's biggest impediments when it comes to attracting foreign investment."
However, McMillan told an audience at the Global Petroleum Show that he supports the steps that the federal government took to push ahead development of the Trans Mountain pipeline expansion.
McMillan said Canada not only needs the Trans Mountain expansion but also Enbridge's Line 3 replacement and TransCanada's Keystone XL if it wants to succeed as a global supplier.
He said the U.S. is an important customer but added that Canada needs to think globally, too.
"The U.S. has growing supplies that they are self-sufficient on gas already and are looking to be self-sufficient on oil in the next decade," McMillan said.
"Today, Canada only has one customer for crude oil, and growing markets around the world want Canadian product so, you know, there's just a natural incentive for us to be building to new markets."