Oil production in Alberta has increased alongside rising global oil demand. Canada’s provincial economic powerhouse produced 238,000 more barrels per day in the first 8 months of 2018 than it did over the same time frame the year before.
Extraction is also on the rise. Since 2010, Alberta has gone from producing under 2 million barrels per day up to more than 3.7 million barrels a day as of August 2018. That’s quite the jump, but not a surprise considering that global oil demand is expected to grow nearly 12% by 2040.
This added production is a major benefit to the economy of Alberta and is a main reason why added pipeline capacity would go a long way not just for the western province, but the nation as a whole. Unfortunately, getting more pipeline capacity for oil and gas producers in Alberta has been a struggle to say the least.
Even with Alberta moving more oil by rail than ever before, transportation bottlenecks have pushed prices for Western Canadian blends down. This, in addition to lack of market access to customers other than the USA and maintenance on several refineries south of the border, has widened the price differential to such an extent that Canada is losing upwards of $100 million a day.
This is money that companies and governments in the United States get to keep because of the massive discount on Canadian oil.
Current Oil Prices (as of November 5th, 2018):
- Brent oil price = $73.89
- WTI oil price = $63.93
- Iranian heavy oil price = $68.01
- Saudi Arabian heavy oil price = $70.58
- Mexican heavy oil price = $68.87
- Canadian heavy oil price = $15.64
Without better access to markets across the globe, whether it be added capacity to our main customer down south or to oil hungry countries like India and China, the full economic benefits of added production now and in the future will not be realized.
Solutions to the Pipeline Problem
It’s no surprise that the solution to the pipeline problem is pipelines!
- Northern Gateway
- Energy East
- Trans Mountain expansion
...were all solutions but were cancelled or suspended for various reasons.
Canadian energy companies produce oil and gas to some of the highest environmental and human rights standards on the planet. With global oil demand growing, Canada should be the one meeting that demand!
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