India and China will take it.
The U.S. Gulf Coast can refine it.
But additional pipeline infrastructure will be needed to move the 1.5 million extra barrels a day of heavy crude oil that will be produced in Western Canada by 2030, says the Canadian Association of Petroleum Producers (CAPP).
In its annual crude oil forecast for 2017, CAPP says the annual supply of Western Canadian oil will be 5.4 million bpd—a jump of 39 percent, or 1.5 million a day, from today’s levels.
The issue, says CAPP, is finding a way to move those barrels when today’s existing pipeline network can transport 4.0 million bpd.
“The urgent need for new pipelines to increase our competitiveness continues to be one of the biggest challenges facing our industry,” says CAPP president and CEO Tim McMillan. “Without access to emerging new markets, we’re putting our economy at risk.”
According to the International Energy Agency’s World Energy Outlook 2016, India and China will collectively account for more than 90% of expected global energy demand growth by 2040. The U.S. Gulf Coast, meanwhile, has an estimated heavy oil processing capacity of more than 2 million bpd, with oilsands crude ideally suited to its refineries.
However, potentially standing in the way of Western Canada’s market access, says CAPP, are:
CAPP also notes that Canada imported more than 600,000 bpd of crude in 2016 into Atlantic Canada, Ontario and Quebec from the U.S., Saudi Arabia, Algeria, Angola and Norway. And since 2008, the U.S. has added 4.4 million bpd of oil production to its energy portfolio, making Canada’s biggest customer its biggest competitor at the same time.
“It’s imperative that we get our oil to markets in all directions, to ensure fair market value for our natural resources, and provide the world with a source of safe, reliable and secure energy from Canada,” says McMillan.
CAPP’s 2017 crude oil forecast can be downloaded from the association’s website.
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