Growth in Canadian oil output could come to ‘complete standstill,’ report says

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.

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.

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.

Just Posted

Not a political question: Thunberg calls for climate action in Alberta

EDMONTON — Teen climate activist Greta Thunberg marched into the middle of… Continue reading

Alleged sex assault victim details struggles in proposed suit against Toronto school

TORONTO — A former student at an all-boys Catholic school in Toronto… Continue reading

Leaders trade accusations of desperation tactics as campaign heads down to wire

OTTAWA — The three main party leaders accused one another of desperation… Continue reading

Probation for some new Alberta bus, truck drivers after Broncos family pressure

EDMONTON — Alberta’s transportation minister says there will be a two-year probationary… Continue reading

Red Deer RCMP looking for missing 64-year-old woman

Red Deer RCMP are asking the public to help find a missing… Continue reading

WATCH: Red Deer Citizens on Patrol monitoring downtown with new program

Volunteers will patrol downtown Red Deer to help keep the city safe.… Continue reading

Your community calendar

Wednesday Red Deer River Naturalists Flower Focus Group Meeting. When: Oct. 16… Continue reading

Meet the candidates running in Red Deer-Mountain View

Each of the candidates running in the Red Deer-Mountain View riding were… Continue reading

Not a political question: Thunberg calls for climate action in Alberta

EDMONTON — Teen climate activist Greta Thunberg marched into the middle of… Continue reading

Red Deer Rebels struggle early, fall to Oil Kings

Oil Kings 5 Rebels 1 It’s been a tough stretch for the… Continue reading

Pick ’Em: No clear favourite on Canadian men’s curling scene this season

The days of just one or two Canadian men’s curling teams being… Continue reading

Brooke Henderson hits hole in 1, leads LPGA Shanghai

SHANGHAI — Canada’s Brooke Henderson hit a hole-in-one and shot a tournament… Continue reading

Alleged sex assault victim details struggles in proposed suit against Toronto school

TORONTO — A former student at an all-boys Catholic school in Toronto… Continue reading

Leaders trade accusations of desperation tactics as campaign heads down to wire

OTTAWA — The three main party leaders accused one another of desperation… Continue reading

Most Read