US Refinery Demand for Canadian Crude to Double by 2015
26 June 2007
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| 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.
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I would bet that in 2015, the "demand" from Canada will be unmeasurable. As in, unable to be satisfied, due to dropping exports from Mexico, South America, middle east, and the north shore. All of those suppliers are dropping in production and seeing increased demand from their own country, causing a double whammy to exportable supplies. UNLESS, we start dropping US consumption at the same rates, which is highly unlikely. It takes crises to spur change here in the good ole US.
Posted by: darwin | 26 June 2007 at 10:22 AM
That's if they have enough water to produce that much. I heard they're already using too much water from the Athabasca. The amount of energy to make the crude is ridiculous too, there's no way Canada can reduce it's co2 emissions while producing all this oil. Not to mention the ecological disaster they're leaving behind.
Posted by: Derek | 26 June 2007 at 10:42 AM
I find the graph a little surprising in that I was under the impression that conventional crude production had already peaked here. ... Of course demand and supply don't necessarily match.
Posted by: NeilPackrat | 26 June 2007 at 10:44 AM
What about Canadian demand for Canadian oil? What will happen when supplies become tight - does Canada HAVE to export all its oil or does it get to use some itself?
Posted by: Ender | 26 June 2007 at 05:27 PM
With the signing of the Canada-US free trade agreement (and then NAFTA) Canada became obligated to guarantee access to its natural resources (I think water is exempt) to the US. This was the major demand of the US (particularly oil). AFAIK it becomes a bidding war as to who gets it. I'm sure the US administration was less than thrilled when a Chinese company won the rights to develop a large portion of the oil sands. Bottom line is we are in the same boat as the US. If they run short, so do we.
Posted by: NeilPackrat | 26 June 2007 at 10:47 PM
Um...Isn't Canada already a net importer?
I was under the impression that they import about as much as they export. It's a shell game, so the US can downplay "Middle east imports".
Posted by: darwin | 27 June 2007 at 07:37 AM
The last numbers I saw (2004) had us exporting about 50% more crude than we imported. If you see large exports and imports it's because, as with many trade items in North America, North-South is easier to do than East-West. Alberta sends most of its oil south to places like Chicago while the Maritime provinces import their gas from the UK and the US.
Posted by: NeilPackrat | 27 June 2007 at 07:52 AM
NeilPackrat - "With the signing of the Canada-US free trade agreement (and then NAFTA) Canada became obligated to guarantee access to its natural resources (I think water is exempt) to the US."
That may be true however if I was a Canadian and I had no oil because all the oil was being sent to the US I think that I would get a bit upset.
I may come to this one day - will Canadians go without so the US can have oil??? Interesting times ahead.
Posted by: Ender | 27 June 2007 at 05:40 PM
NeilPackrat - "With the signing of the Canada-US free trade agreement (and then NAFTA) Canada became obligated to guarantee access to its natural resources (I think water is exempt) to the US."
That may be true however if I was a Canadian and I had no oil because all the oil was being sent to the US I think that I would get a bit upset.
I may come to this one day - will Canadians go without so the US can have oil??? Interesting times ahead.
Posted by: Ender | 27 June 2007 at 06:55 PM
The only way that all the oil would be going to the US and we would have none is if we no longer had the ability to compete for the oil. We didn't guarantee the sale, only an open market.
Truth is, if it got that scarce and we started to refuse to sell it to them, they'd start to vilify us in their press until they had an excuse to invade. We already have some ignorant people down there calling us commies (e.g. Pat Robertson). It wouldn't be long before they were claiming that we had weapons of mass destruction (much better beer).
At least this way they're paying us for the oil. It isn't always easy living next to a major military power. An American invasion would be really quick, but would destroy both countries.
Posted by: NeilPackrat | 27 June 2007 at 11:23 PM
Keep sending these hope I can make my way back to detph free.
Posted by: John J Collins | 28 June 2007 at 06:59 AM