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While the oil sands grab all the headlines, conventional oil from Alberta is also likely to emerge as a strong contributor, cementing the province’s position as an energy — albeit landlocked — superpower, leaving other provinces in the dust.
The concentration of output in Alberta means pipelines and railway issues will only magnify as nature appears to have played a cruel joke by bestowing geological riches on the province, but spiked it with geographic constraints.
The Canadian Association Petroleum Producers’ bullish, almost defiant, forecast, published this week, shows Alberta oil sands and tight oil production growing leaps and bounds, almost unconstrained by market access issues.
Oil sand’s production alone will double from current levels in a decade and reach 5.2 million barrels per day of production by 2030. Total Canadian crude production will hit 6.7 million barrels per day, expected to be the fourth largest in the world by that time.
That’s nearly 500,000 barrels per day more from CAPP’s previous estimate, and 800,000 bpd higher than the International Energy Agency forecast. “Of the 500,000 bpd of additional capacity, 300,000 bpd is from conventional tight oil production, and only 200,000 bpd from the oil sands,” said Greg Stringham, vice-president, markets and oil sands at CAPP.
Alberta will make up 88% of total Canadian oil by 2030, from its current level of 68%, according to the association’s benchmark annual report.
The province will also lead the tight oil surge as companies crank up production from stubborn reservoirs via horizontal drilling coupled with multi-stage fracking.
Last year, CAPP had predicted Alberta conventional production to reach 408,000 bpd by 2030. This year, its estimates have inflated to 703,000 bpd, which could still be conservative, the association said.
While bullish on Alberta, the forecast may dampen the aspirations of other provinces harbouring hopes of their own mini oil booms, as they award leases and seek investments from a whole host of investors.
Even Saskatchewan, the province that spearheaded the drive for tight oil, is set to play second-fiddle to Alberta going forward.
“Tight oil is moving from Saskatchewan to Alberta,” Mr. Stringham said. “Last year most of the growth came from Saskatchewan, as it was the first one to embark on tight oil projects. Production is now relatively flat, and we are seeing that technology applied and move into Alberta.”
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