Oilsands production to grow slow and steady over next 20 years, report says
Oilsands production is expected to grow gradually over the next 20 years, according to a report from the Canadian Energy Research Institute.
The report considered three scenarios: a high case, a low case, and a reference case for oilsands production growth over the next 20 years.
According to these projections, total oilsands production could rise as high at 7.5 million barrels per day (bpd), or as low as 4.0 million bpd. The reference scenario estimated 5.5 million bpd in 2038.
The CERI also considered the state of new and existing projects and factored in assumptions for project delays and the state of technology and development.
According to Dinara Millington, author of the study and vice-president of research at CERI, factors such as environmental regulations, cost management for projects and market access will also affect growth moving forward.
Total 2017 production from the oilsands added up to 2.77 million bpd, consisting of mainly non-upgraded bitumen and synthetic crude oil. This number was up about nine per cent from 2.54 million bpd in 2016.
However, Millington said the reference case shows a much lower growth rate over the 20 year forecast period, sitting around three per cent, with a slower growth rate initially over the first 10 year period.
As well, operating costs for production have been on a downward trend over the last few years, according to Millington. Part of this is due to the low cost of natural gas, which is a primary source of fuel in oilsands production. Labour costs have also come down, which Millington said took up a significant percentage of operating costs.
Despite this, Millington still sees room for improvement in oilsands operations.
вЂњWhen we start to see costs flatten out, thatвЂ™s when we know (prices are at a good point),вЂќ she said.
Moving forward, Millington expects to see production become far more technology driven. Less energy will be used to produce bitumen and technology should become more advanced with more automation.
The report also found the oil and gas industry contributed about $108 billion to CanadiaвЂ™s GDP in 2017, around 6.5 per cent of total GDP. Oilsands production made up $44.2 billion, nearly half the contribution of the entire industry.
Over the next 10 years, the report estimates the industry will contribute another $1.4 trillion, creating $139 billion in federal revenue.