The value of crude oil exports from Canada has increased over 15-fold in the last 30 years, according to a report from Statistics Canada and the Canada Energy Regulator.
The increase means exports of the resource accounted for more than 14% of Canada’s total exports in 2019, with a value of C$84.3 billion, The Canadian Press reports.
In 1990, crude oil made up only 3.6% of the country’s total exported products.
The report says crude oil production has also grown considerably over the last three decades, led first by conventional oil and then by the oilsands in the last 15 years, with Alberta becoming the largest contributor to Canadian production in 2009.
The report attributes some of that growth is attributed to high oil prices in the late 2000s and early 2010s. From 2010 to 2015, heavy oil exports rose by an average rate of 12.5% per year due to increased oilsands production.
“The world thought it was running out of oil, so capital was poured into the oilsands, which were seen as one of the few last places in the world that was free and open to foreign investment to drive oil and gas production higher to meet anticipated growing demand,” said Kevin Birn, a chief analyst for IHS Markit.
Birn told CP Monday that the rush to capture profits in the oilsands is what led to the acceleration of Alberta’s oil and gas industry.
Recently, the COVID-19 pandemic has had a “substantial impact” on production and exports, causing values to drop to their lowest point since 2002 in April 2020. But the agencies say further analysis is needed to determine the full impact the pandemic has had on the crude oil sector.
Birn said demand for the resource has bounced back from the dip early last year. “It’s still a significant economic force in the country and a major driver of prosperity,” Birn said. [Even though the industry is “de-manning” itself as fast as it can, and the surrounding economy has created 42 jobs for each one the fossil sector has lost since 2014—Ed.]
An IHS Markit report from December found that delays in the expansion of Canada’s export pipeline capacity have contributed to lower prices in Western Canada, representing a loss of $17 billion for the crude oil industry over the last five years. Other challenges come from changing demands, Birn added.
“When we look forward, we do see a deceleration of growth taking place,” he said, as fewer transportation projects come online and investors turn some of their attention to decarbonization.
But Birn said he was “cautiously optimistic” that current pipeline projects, including Enbridge Energy’s Line 3 oil pipeline and the Trans Mountain pipeline expansion, will meet Western Canada’s demand for capacity if and when they’re complete.
This report by The Canadian Press was first published June 14, 2021.