CALGARY – The Canadian Association of Petroleum Producers expects oil production to climb 33 per cent by 2030 even as pipeline constraints and competition for investment threaten to slow future growth.
The forecast calls for Canadian crude oil production to reach 5.12 million barrels per day by 2030, up from last year’s projection that output would hit 4.93 million bpd.
CAPP president Tim McMillan said Tuesday that the crude supply will grow by five per cent per year to 2020, but then slow to two per cent growth as major oilsands projects wrap up and new investments are hampered by market uncertainties.
“What we’re predicting here is lower investment numbers going forward,” McMillan said.
“We’re seeing increased capital moving south of the border to the U.S., as Canada’s competitive position is deteriorating relative to our largest customer, trading partner, and now competitor for energy markets.”
CAPP expects oilsands spending to fall this year to $15 billion, the third consecutive decline from 2014’s peak of $34 billion.
With no new major projects emerging, the forecast for oilsands production is largely in line with last year’s expected 3.7 million bpd by 2030, up from 2.4 million bpd in 2016.
The association did, however, revise upwards the long-term forecast for conventional Western Canada production by about 100,000 barrels a day as drilling activity is already expected to rebound 70 per cent this year from last.
Eastern Canada also saw a 100,000 bpd boost to its forecast after Husky Energy said it was going ahead with its $2.2-billion West White Rose offshore project.
McMillan said the already constrained pipeline capacity is a deterrence for future investment and it’s crucial to gain access to fast-growing markets like India and China.
“It is imperative that Canada gets it’s products to market, that Canada becomes a secure, reliable supplier of choice in growing markets around the world.”
His comments come as the future of Kinder Morgan Canada’s (TSX:KML) Trans Mountain expansion project, which would add 590,000 bpd of capacity to the West Coast, remains cloudy with the B.C. NDP and Green party alliance committed to stopping it with all means available.
Trans Mountain is scheduled to start construction in September, while other major pipeline projects including Enbridge’s (TSX:ENB) Line 3 replacement and TransCanada’s (TSX:TRP) Keystone XL and Energy East projects still require regulatory approvals.