Unlike in the U.S., Canada has not been able to reach its full potential when it comes to crude oil production, says ATB Financial’s economics and research team.
In its daily economic update The Owl, the financial institution said the U.S. shale oil revolution made possible by horizontal drilling and hydraulic fracturing pushed U.S. field production of crude oil up from 5.48 million barrels a day (mb/d) to 10.96 mb/d in 2018 – an increase of 100 per cent.
“The U.S. Energy Information Administration’s latest forecast has U.S. crude production rising to 14.09 mb/d by 2025 for a total increase in production of 157 per cent compared to 2010. At the same time, new pipelines are enabling, and will continue to enable, U.S. crude to get to market with relative ease,” said the report.
“The story in Canada is similar but different. The unlocking of the oil sands helped push Canadian crude oil production up from 2.84 mb/d in 2010 to 4.59 mb/d in 2018 – an increase of 62 per cent. Alberta’s production was up 76 per cent.”
ATB said the latest forecast from the Canadian Association of Petroleum Producers shows Canadian crude oil production continuing to rise, reaching 5.40 mb/d by 2025 for a total increase in production of 93 per cent compared to 2010. Alberta’s production is expected to increase by 108 per cent.
“An ongoing lack of pipeline capacity, however, has restricted the growth of Canadian crude production. ‘Pipeline constraints, a lack of market diversity, and inefficient regulations’ have led CAPP to cut its growth forecast in half compared to what it was projecting as recently as 2014,” said ATB.