Canadian Oil Pathways
Study Released August 21, 2014
Study No. 144
For the first time in many years, Canadian crude oil production (excluding oil sands) has reversed its downward trend due to technological advancements able to unlock hard-to-produce shale oil resources. With continued innovation and technology, combined production of crude oil (including condensate and pentanes plus volumes) and oil sands for Canada averaged 3.5 million barrels per day in 2013. This growth was impressive given the lengthy list of issues facing the industry: rising project costs, skilled labour shortages, rising tight oil production in the US, offshore competition, shifting demand, transportation infrastructure constraints, pipeline approval delays, the lack of market diversification, widening basis differentials, and the challenges to development from environmental groups and the general public. Although the future for oil production growth in Canada still looks favourable, these and other issues could significantly impact the future of the Canadian oil industry.
Taken together, an array of national, continental and global challenges could limit the growth, profitability and competitiveness of the Canadian oil industry. Looking out to 2030, a key question is: “How can industry, government and others work to understand and address an array of supply, demand, transportation, environmental and social issues with a view to improving the societal value of oil development, which itself provides a significant contribution to the Canadian economy?” The Canadian Energy Research Institute (CERI), in collaboration with ICF International, and Scenarios to Strategy Inc. (S2S) developed four plausible pathways, or narratives, of the future of the Canadian oil industry.