The Canadian National Energy Board (NEB) has predicted that the country’s oil and natural gas production will continue to rise for the next 30 years, but at a slower rate than previously forecast.
The NEB said on October 26 in its energy update that oil production in Canada – under pressure from high costs in a low oil price environment, as well as from new climate change policies – would grow to 5.7 million bpd by 2040. This is roughly 400,000 bpd less than what the board had forecast in its January outlook. Canada’s production averaged roughly 4 million bpd in 2015.
The Canadian Association of Petroleum Producers (CAPP) – an industry group – also downgraded its production outlook earlier this year. CAPP now forecasts that Canada will produce 4.9 million bpd by 2030, compared with a previous estimate of 5.3 million bpd.
The NEB has estimated the oil price will average US$68 per barrel by 2020 and US$90 per barrel by 2040, a far cry from prices in excess of US$100 per barrel seen in 2012-13. In January, the board had forecast that prices would reach US$80 per barrel by 2020 and US$105 per barrel in 2040.
The NEB expects global demand for oil to continue rising but at a slower pace than previously expected over the next 30 years on lagging economic growth. In Canada, where high-cost oil sands output represents over 50% of overall crude production, low prices have led to a number of projects being delayed or cancelled.
In addition, more stringent environmental rules relating to carbon emissions in Canada will see renewable energy and natural gas projects promoted, the regulator said.
However, delays in launching proposed LNG projects in Canada are anticipated to affect production, with the NEB scaling back its previous 2020 projections to 14.8 bcf (419 mcm) per day from an earlier forecast of 15.4 bcf (436 mcm) per day for 2018 in its January outlook. The NEB now forecasts natural gas production to increase to 17.3 bcf (490 mcm) per day by 2025, down by 600 mmcf (17.0 mcm) per day from the previous estimate.