|Forecast Canadian oil exports to the US. Click to enlarge.|
Demand for Canadian crude oil by US refineries will likely double from about 1.6 million bpd in 2006 to almost 3.1 million bpd by 2015. Over the same period, demand by Canadian refineries for the Canadian oil is expected to rise from 765,000 bpd in 2006 to almost 1.1 million bpd in 2015, a 44% increase.
The forecasts come in the annual long-term crude oil forecast produced by the Canadian Association of Petroleum Producers (CAPP).
CAPP prepared two production and supply cases: the Pipeline Planning Case and the Moderate Growth Case. In the Pipeline Planning Case, western Canadian crude oil supply grows from 2.4 million bpd in 2006 to almost 5.3 million bpd in 2020 while in the Moderate Growth Case, supply rises to about 4.6 million bpd. The majority of the growth is from the oil sands.
The main difference between the two scenarios is in the slower ramp up of in situ oil sands production in the moderate case. Canadian crude oil production comprises western Canadian, which includes crude oil from the oil sands and conventional resources, as well as offshore production from the east coast of Canada. The western conventional resources are in decline, and although East Coast crude oil production is forecast to increase this year, a gradual decline is expected.
In the more aggressive Pipeline Planning Case, output from oil sands in situ and mining projects is projected to increase four-fold by 2020. Current oil sands production, representing about half of western Canada’s total crude oil production, is expected to grow from roughly 1.1 million bpd in 2006 to approximately 3.4 million bpd in 2015 and to about 4.4 million bpd in 2020 in the Pipeline Planning Case.
The United States is Canada’s largest market for crude oil exports. In 2006, Canada was the largest exporter of crude oil to the US, supplying almost 12% of United States requirements, ahead of both Mexico and Saudi Arabia. The major growth in shipments to the US is expected to be conventional medium sour and heavy crude oils.
One of the key conclusions of the forecast is the need for additional pipeline capacity to meet growing demand from existing and new markets.