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Production of Canadian Crude to Nearly Double by 2020 Due to Oil Sands

Forecast of Canadian Oil Sands versus Conventional Oil Production. Click to enlarge. Source: CAPP

Production of crude oil in Canada is set to nearly double by 2020, according to the Canadian Association of Petroleum Producers’ (CAPP) just-released annual Crude Oil Forecast.

This marks a significant increase from the projections last year, driven by increasing oil sands production.

Total Canadian oil production is projected to increase from 2.5 million barrels per day (bpd) in 2005 to 4.6 million bpd in 2015—an increase of 750,000 bpd from CAPP’s 2005 forecast. Growth after 2015 will bring total Canadian production to nearly 4.9 million bpd by 2020.

Oil sands production, which now exceeds one million bpd, is forecast to reach 3.5 million bpd by 2015 and 4.0 million bpd by 2020, accounting for more than 80% of Canadian production. In 2005, oil sands production represented 45% of total Canadian output.

Both in-situ and mining projects contribute to the growth in oil sands production, with a four-fold increase in production for each category.

Production of conventional crude oil has declined gradually in Canada since the late 1990s. Although the lifespan of conventional producing wells is being extended as marginal wells are economic due to higher oil prices, conventional production continues to decline.

The growing total production will need more pipeline capacity to meet demand from new and expanded markets. A number of new pipelines and expansions have been announced and potential shippers are assessing the alternatives to determine which projects they support.

The increase in our overall production is important but the changing mix of the Canadian crude slate from traditional conventional crude to oil sands heavy blends and synthetic crude is also a big issue for the industry. It’s critically important for pipelines and refineries to be able to process both the added volumes of crude and the new mix.

—Greg Stringham, CAPP Vice President, Markets and Fiscal Policy

Conventional heavy oil and bitumen oil must be diluted with a lighter commodity such as condensate/pentanes or synthetic crude to lower the viscosity and density of the crude, thereby allowing for efficient transportation through pipelines.

The main source of diluent so far has been condensates/pentanes produced in western Canada. These products are in decline, and will not provide sufficient supplies of diluent to match forecast growth of oil sands bitumen.

Accordingly, producers have been evaluating options to import condensate using either existing infrastructure such as railroads or through a condensate import pipeline. As an alternative, producers are also considering using synthetic for blending.

CAPP’s 2006 production forecast contains two supply scenarios based on the evolution of each scenario.

In addition, a constrained production case shows how delays in the growth of markets, pipelines, infrastructure, equipment and labour could potentially slow oil sands development.

The forecast does not factor in possible environmental constraints on growth in oil sands production, such as water availability.




Does this mean Canada is going to renege on participation in the Kyoto agreement?


Ivanhoe Energy might have solved the dilutant problem, if I'm reading this story right.

In this latest test, California heavy oil VTBs, with a very high viscosity (approximately 300,000 centipoise at 140oF), were converted to a low viscosity product (1300 centipoise at the same temperature) – a reduction in viscosity of over 99%. VTBs are the heaviest fraction of crude oil and, at room temperature, are virtually solid - similar to dry road asphalt. Once processed with Ivanhoe Energy’s HTL equipment, the upgraded VTBs are blended with the lighter crude oil fractions removed by earlier processing and would yield a product with a viscosity low enough to flow freely in a pipeline without the need for adding diluent or pipeline heating.

Canada will renege on Kyoto because we have Stephen Harper as Prime Minister. :-(
It's sad really, we had to get rid of Martin because he did nothing we wanted him to do and now we've got Harper, who will do everything we don't want him to do.

Roger Pham

The Canadian, given their cold climate and lack of sunshine, should keep the oil to themselves for their future generation, just in case. Likewise, so should the Russian and the Alaskan, come to think of it. And the MiddleEastern people with their very hot climates, should try harder to restrict petroleum export in order to reduce global warming...well, only if the USA and especially Bush and Cheney would let them...Getting complicated now...

Shaun Williams

Maybe you've hit the nail on the head. Apparently our (Australian) "Environment" Minister has just announced he'd like Canada to join our lame duck Asia Pacific coalition of the unwilling, see;
Canadian Climate Change Deal.

Paul Dietz

Canada was going to fail to meet its obligations under Kyoto regardless of who was in charge. The current government is just being somewhat more honest about that fact.

fyi CO2

Excellent perspective Roger! Sad that globalisation /aka greed/ has all these exporting countries discounting the future for short-term 'gains'.


Stephen Harper is simply stating the obvious TRUTH: We (Canadians) can have Kyoto or oil sands development, not both. In fact the IMPLICIT decision was made before him during Liberals. Liberals simply spent money on ads and fliers. They didn't try to regulate or somehow control oil sands development. Therefore we are creating more pollution not less. It is simply the fact!

The only realistic plan to meet Kyoto must include severe restrictions on oil sands development as well as many other sources (cars, etc.) How many Canadians are ready to sacrifice economic benefit of oil sands development AND limit/reduce their personal energy waste (such as reduce engine sizes, cancel certain vehicle types, car pooling etc.)? How long would Harper government last if it tried to do these things?

Agree with him or not, Harper is a realist. After all it is not Harper who is creating all the pollution. It is all of us! It is that dude who punched gas pedal on his V6 monster to pass me, and the other fella driving an empty pick up truck, and ....

I am reading all this criticism of Harper in papers and elsewhere from all sorts of people. Sorry, but the is BS. Polluition is a PERSONAL resposibility as we create it. If you want to meet Kyoto start with your own energy use and reduce pollution. Try reducing you energy use by 30% at home and see how that goes.

Harvey D.

Extracting, processing, upgrading, transporting and burning fossil fuel from Tar Sands,(mostly in USA gas guzzlers) will pollute Alberta for generations to come and offset short term gains many times over. Being a good neighbor is OK but not if it destroys your own land, rivers, lakes and people.

Canada, without Alberta could meet Kyotos's commitment (1990 level - 6%) but with increased Tar Sands activities Canada's GHG will be as high as 50+% above the commitment level.

Doubling Tar Sands prodcution from both methods; Mining and In Situ; means that most of the increased production will be from mining because the current In Situ method is almost zero and doubling that type does not mean much.

One way to offset part of the damage done in Alberta would be to develop some 20 000 MW of new Hydro power in Labrador and Quebec + another 20 000 MW with large colocated wind mills and export most of that clean power to Ontario and North-Eastern USA to replace existing Coal fired power plants.

By giving huge subsidies to Nuclear and Oil but NONE to Hydro and very little to Wind we will be a long way from Kyoto.

hampden wireless

You wrote:
By giving huge subsidies to Nuclear and Oil but NONE to Hydro and very little to Wind we will be a long way from Kyoto.
Given that nuclear does not contribute to global warming and helps Canada meet Kyoto subsidies are a good thing.

An oil sands operation is going to screw up the enviroment for sure. A nuclear plant is 99% likley not too.

Harvey D.

Hampden: You're correct on Nuclear, but it is another type of potential pollution. However, it certainly got (like Oil Sands) huge subsidies over the years with very little dividends in return. (Hydro-Quebec, without government subsidies for Hydro projects, is paying $1 Billion/year in dividends).

Old and future decommissioned Nuclear sites remain a burden that we have not fully addressed yet.

Combo Hydro-Wind power along the windy Labrador, Ungava, Hudson and James Bay coast is a huge untapped source of clean electricity for eastern Canada and USA. It could be a very good long term investment because water + wind will be around for a long time. It could give full financial independence (and jobs) to the native people living in the area and important dividends for Newfoundland and Quebec provinces.

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