Canadian oil production growth could slow down or freeze altogether: report

CALGARY -- Growth in Canadian oil production is likely to slow down or grind to a halt five years from now once projects now under construction are built, the International Energy Agency warns in a report released Monday.

See Full Article

The Paris-based organization said it projects Canada to add 800,000 barrels a day of production by 2021, which would bring total output to 5.2 million barrels a day. Most of that growth is expected to come from Alberta's oilsands, with bitumen production expected to hit 3.4 million barrels a day.

But a number of factors including the expense of producing crude from the oilsands threaten to curtail or put a stop to such growth, the IEA said.

"Heightened environmental concerns, a lack of pipeline access to new markets and the unknown impact of the victory by the New Democratic Party in Alberta's elections last year are causing companies to slow development," it said.

"As such, we are likely to see continued capacity increases (in) the near term, with growth slowing considerably, if not coming to a complete standstill, after the projects under construction are completed."

A number of new developments in Canada recently commissioned or nearing completion will drive growth over the next five years, the IEA said. They include Imperial Oil's Kearl expansion project in Alberta, which was completed in June 2015, and the Hebron offshore oil site off Newfoundland set to begin production in 2018.

The IEA report, which examined global oil production forecasts up to 2021, said there was a 24 per cent cut in oil investment around the world last year and another 17 per cent reduction is expected this year.

Jackie Forrest, vice-president of energy research at Arc Financial, agreed that oilsands development will slow down as companies look to smaller investments and faster returns.

"There is a lot of uncertainty about future growth and a lot of headwinds coming at the oilsands," said Forrest. "Even if you assume a price recovery, there's more of a favour for shorter cycle-type projects, unlike the oilsands which are megaproject investments."

A decline in the number of new projects would significantly change the dynamics of the oil sector's workforce from growth to maintenance, the industry-funded Enform organization said last week.

It projects that the number of construction jobs will drop by 84 per cent, or about 10,300 positions, by 2020, while the number of operations and maintenance jobs would grow by 9,870.

Since mid-2014, crude prices have plunged by 70 per cent. On Monday, oil was trading above US$33 a barrel.



Advertisements

Latest Economic News

  • Wind company owed $28M by federal government asks court to force payment

    Economic CTV News
    TORONTO -- A wind power company is going to court to try to get $28 million it is owed by the federal government over an Ontario offshore wind moratorium. Windstream Energy had a 300-megawatt project planned for an offshore wind project in eastern Ontario when the provincial government abruptly enacted the moratorium in February 2011. Source
  • Asian stocks drift higher as investors await Fed minutes

    Economic CTV News
    SEOUL, Korea, Republic Of -- Asian stock markets were mixed with subdued movements on Wednesday, getting little push from Wall Street's record high overnight, as investors awaited the Fed's latest meeting minutes due later in the day for clues about the U.S. Source
  • U.S. shutting down Dakota Access oil pipeline protest camp

    Economic CTV News
    BISMARCK, N.D. -- The Army Corps of Engineers' plan to close a Dakota Access pipeline protest camp that's been around for more than six months isn't likely to be the demise of on-the-ground opposition in North Dakota. Source
  • CRA's new fingerprinting policy could create travel problems for accused tax evaders

    Economic CBC News
    The Canada Revenue Agency has begun to record the fingerprints of every person charged with tax evasion, a move that could severely restrict foreign travel for anyone accused but not necessarily convicted of a criminal tax offence. Source
  • Alberta Energy Regulator names companies falling behind on pipeline safety

    Economic CTV News
    CALGARY - The Alberta Energy Regulator is making it easier for the public to see which oil and gas companies are falling behind on pipeline safety. The regulator launched a new pipeline reporting website Tuesday that lays out several pipeline safety ratings for all operators in the province over the past two years. Source
  • Wal-Mart keeps working to make inroads against Amazon

    Economic CTV News
    NEW YORK -- The nation's largest retailer keeps working to make headway against the largest online seller. Wal-Mart drew more shoppers to its namesake stores in the United States and its online sales soared 29 per cent in the fourth quarter, which covers the critical holiday shopping season. Source
  • Verizon forces Yahoo to cut sale price over hacking scandal

    Economic Toronto Sun
    SAN FRANCISCO — Yahoo is taking a $350 million hit on its previously announced $4.8 billion sale to Verizon in a concession for security lapses that exposed personal information stored in more than 1 billion Yahoo user accounts. Source
  • Seven-year-old girl's job application to Google catches CEO's eye

    Economic CTV News
    For seven-year-old Chloe Bridgewater, it’s never too early to get started on building your career. The girl from Hereford, U.K. penned a job application to Google CEO Sundar Pichai after seeing images of Google offices outfitted with bean bag chairs, go karts and slides. Source
  • French leftist lawmakers take EU-Canada free trade deal to court

    Economic CBC News
    More than 100 French left-wing lawmakers decided on Tuesday to appeal to the country's Constitutional Council to block a contentious free trade deal between the European Union and Canada. Supporters of the Comprehensive Economic and Trade Agreement (CETA) say it will boost economic growth and jobs on both sides of the Atlantic. Source
  • Feds may face 'rough' NAFTA renegotiation: former PM Mulroney

    Economic CTV News
    TORONTO - Former prime minister Brian Mulroney says the federal government may face a "rough negotiation" when it comes to NAFTA, but he believes Canada will nonetheless emerge with strong ties to the U.S. and Mexico. Source