By OilPrice.com
Canadian oil production is expected to be in a boom cycle for the next 20 years or so, fed largely by oil sands production in Alberta. Smaller players in the vast oil sands region are already making a splash with new operations while majors like TransCanada and Enbridge are quickly getting back to work following last month’s flooding. Canadian Prime Minister Stephen Harper said parts of Quebec look like a “war zone” following last weekend’s train wreck. With a fight on his hands to counter the dirty oil narrative, his administration, and those invested in the energy sector, may face more combat in the future if the oil sands engine runs out of track.
The Canadian Association of Petroleum Producers expects national oil production to hit 6.7 million barrels per day by 2030, more than double the production level from last year. North American oil production is so strong that it’s too much for existing pipeline capacity to handle. Canadian energy company Enbridge just got its pipeline services back on stream following devastating floods in oil-rich Alberta. It aims to build the mega Northern Gateway pipeline to British Columbia for energy-hungry Asian markets. On the other side of the country, Harper was forced to deal with the “war zone” left over when an oil train derailed in a Quebec town near Maine, refueling the oil debate on both sides of the border.
CAPP said oil production from Alberta is expected to make up about 75 percent of the production gains through 2030. While no secret to those in the industry, oil sands production has been in the public’s eye for the past few years because of the debate surrounding TransCanada’s planned Keystone XL pipeline from Alberta through the United States. In the shadow of giants like Enbridge and TransCanada are juniors like Aroway Energy, which said Wednesday it got the nod from the Alberta Energy Regulator to increase production from its Kirkpatrick Lake operations in the province. CEO Chris Cooper said the approval “could not have come at a better time” because oil prices are at all-time highs for the year. The boom from Alberta is such that even OPEC stood up and took notice in reporting this year.
Harper spent last month trying to woo European investors to the Canadian economy. European leaders are considering legislation that would put a black mark on Alberta’s oil sands because they’re seen as more polluting than other types of crude oil. Canadian Natural Resources Minister Joe Oliver said the Harper administration didn’t want its “reputation sullied” over oil sands.
Aroway in February said it had almost doubled production from 600 to more than 1,000 barrels of oil equivalent per day in quick fashion thanks to Alberta oil sands. Rival majors like Talisman Energy, however, are slashing their spending already because of higher operating costs. The U.S. oil boom in states like Texas and North Dakota, meanwhile, may leave Canadian companies in the dust. Harper, for his part, was in enemy territory in a European community already debating how it can outdo renewable energy goals it hasn’t even met yet. The mid-term outlook for even marginal players in Canadian oil sands, like Aroway, looks optimistic. The energy tides may be shifting, however, suggesting that while production may gain steam, Canada’s heavy reliance on heavy crude may run off the rail.
By. Daniel J. Graeber of Oilprice.com
Source: http://oilprice.com/Energy/Crude-Oil/Is-Canadas-Oil-Charm-Offensive-Yesterdays-News.html
