Despite slumping investment in the oil sands region, Canada will be able to produce 1.41 million b/d more crude oil in 2035 than it did last year if pipeline capacity expands, says the Canadian Association of Petroleum Producers.
Most of the production increase will come from oil sands projects.
Total Canadian production of crude oil will increase to 5.6 million b/d in 2035 from 4.19 million b/d in 2017, CAPP says in its 2018 forecast.
During the period, production in western Canada will increase to 5.53 million b/d from 3.96 million b/d, while flow from eastern Canada falls to 70,000 b/d from 220,000 b/d.
Conventional production in western Canada in 2035 will be little changed from the 2017 rate at 1.33 million b/d. Output will rise to 1.49 million b/d in 2025, largely because of a surge in production of pentanes and condensate in the Montney an Duvernay plays, and subside later in the period. Eastern Canadian output, too, will increase early, peaking at 290,000 b/d in 2025 as production rises from offshore Hebron field and satellite fields start flow before falling in later years.
Although oil sands capital investment has fallen from $34 billion (Can.) in 2014 to a forecast $12 billion this year, CAPP expects output to rise to 4.19 million b/d in 2035 from 2.65 million b/d last year. In situ production will account for most of the oil sands growth, rising to 2.46 million b/d from 1.51 million b/d. But mining output will climb, too, to 1.73 million b/d from 1.14 million b/d.
To account for blending of imported light hydrocarbons with bitumen to accommodate transport, CAPP also projects oil supply, which from western Canada will increase to 6.16 million b/d in 2035 from 4.19 million b/d in 2017. The association notes that the 2017 rate exceeded the capacity of pipelines carrying oil out of western Canada.
“The growth of Canada’s crude oil industry depends on new pipelines and new policies,” CAPP says, adding that Canada’s ability to compete with other energy-producing countries “has eroded in recent years as a result of increasing regulatory cost burdens, climate change policies, and its inability to get pipelines built.”
