OTTAWA — Oilsands production in Canada will likely triple by 2035, making it the overwhelming source of Canadian crude oil and opening doors to additional energy exports, says a new report from the National Energy Board.The NEB says massive growth in oilsands development, coupled with a moderate increase in Canadian energy demand, means the amount of net crude oil available for export will more than triple over the next 25 years — good news for a federal government eyeing new energy export markets in the Asia-Pacific region.
Unconventional energy production — including development of the oilsands and shale gas — will emerge as the “dominant source of supply growth” over the next quarter-century, according to the NEB, Canada’s energy regulator.
But the growth in oilsands production is sure to spark additional criticism about developing the so-called “dirty oil” and its impacts on land, air and water.
The European Union is considering a fuel quality standard that would penalize the oilsands, while the Obama administration has delayed a decision until 2013 on the contentious Keystone XL pipeline that has sparked mass protests in the United States.
As conventional crude production continues to decline in Canada over the next quarter century, oilsands production will triple during that time to 5.1 million barrels per day, from the current 1.7 million, the board predicts.
The ramping up of bitumen production will see the oilsands increase its share of Canada’s total oil supply to 85 per cent by 2035, up significantly from the current 54 per cent, says the regulator’s report.
“We’re very much aware that we have oil that the world needs and wants and we can really in a responsible way become a source of energy security for the world,” federal Natural Resources Minister Joe Oliver said Tuesday about the NEB report.
“We need to diversify our customer base.”
Under its mid-range forecast, the NEB says total crude oil available for export will increase 148 per cent over the next quarter-century to five million barrels a day.
But Nathan Lemphers, a senior policy analyst with the Pembina Institute, an Alberta-based environmental think-tank, said governments and industry must address the mounting environmental challenges with oilsands development if Canada is to reach its energy potential.
“It may be possible to have that level of production, but you’ll start to have more and more problems — just like they’re having with Keystone XL or the fuel quality directive — until you start addressing the oilsands’ environmental impact,” Lemphers said.
“If any growth is to be seen from that industry, there will need to be a marked improvement in environmental management and regulation in the industry.”
The U.S. government’s decision to delay a ruling on the $7-billion Keystone XL oilsands pipeline, while it looks at rerouting it, has the federal government eyeing Asian markets for Canadian petroleum exports.
Currently, Canada only ships oilsands crude to the United States. Keystone XL would carry up to 830,000 barrels of oil per day from northern Alberta to refineries on the Gulf Coast of Texas.
“Canada can and will provide Asia with the resources it needs to fuel the rapid pace of its economic expansion,” Oliver said Tuesday.
Canada’s energy hopes are very much pinned on Enbridge’s $5.5-billion Northern Gateway pipeline, which would ship oilsands bitumen from northern Alberta to port in Kitimat, B.C., where oil would be loaded onto tankers for export to Asia.
The Northern Gateway project is currently under review by the NEB and the Canadian Environmental Assessment Agency. The pipeline could be operational by 2017.
The NEB report notes Canada currently has 173 billion barrels of remaining proven oil reserves, 98 per cent of which is located in the oilsands. However, the country has “ultimate potential” of 343 billion barrels, it says.
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Source: National Post
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