Canada’s tar sands/oil sands production will continue to grow through 2020, although the rate of growth will slow down, according to an analysis by Colorado-based industry analysts IHS Inc.
“Oil sands production is forecast to grow by 800,000 barrels per day by 2020, a level that will keep Canada among the largest sources of growth in global oil supply throughout that period. Canada will remain the third largest source of supply growth in the world, a position it has held since 2005,” World Oil reports.
“The updated production forecast from IHS is 280,000 barrels per day less than a previous outlook prior to the collapse in crude oil prices, which now stand at roughly half the level of a year ago. However, despite the lower crude prices, oil sands production is still expected to register strong growth through 2020,” the publication states. Existing projects that can break even at an oil cost of $30 to $42 per barrel will just continue operating, while projects under construction that have already consumed significant capital investment will likely be completed.
“A review of oil sands development over the years shows a history of growth, even when headwinds to production emerged,” said IHS Energy Director Kevin Birn. “Certainly growth would have been greater had prices remained high, but there is sufficient inertia in the system from projects already under way to carry growth to nearly 2020.”
He added that “while the trajectory of longer-term oil sands growth beyond 2020 is not assured (for instance, the impact of some new government policies remains uncertain), the pillars of past growth—innovation, collaboration, and stable investment climate in Canada (not to mention U.S. heavy crude demand)—certainly remain.”