Page 8 - NorthAmOil Week 49 2021

NorthAmOil POLICY NorthAmOil

The regulator noted
the long lifespans and
relatively low operating
costs of oil sands
projects.

Canadian regulator predicts

earlier oil production peak

CANADA THE Canada Energy Regulator (CER) has said low,” the CER’s chief economist, Darren Christie,
that it now anticipates that the country’s oil pro- said during a news conference this week. “The
duction will peak in 2032, seven years earlier vast majority of oil sands production we have in
than previously forecast. 2050 is coming from facilities that are already
In its ‘Canada’s energy future 2021: energy producing today,” he added.
supply and demand projections to 2050’ report, The CER’s report examined various scenar-
the regulator said that without carbon capture ios. In a scenario where countries pursue less
and storage (CCS) technology, fossil fuel use stringent decarbonisation measures, the regu-
would fall by 62% in the next 30 years if Canada lator projects that Canadian output could peak
and other countries continue decarbonisation at 6.7mn bpd in 2040 while Brent averages $70
efforts at their current pace. Under this sce- per barrel for much of the forecast period. And
nario, Canadian energy consumption would be if more aggressive decarbonisation policies are
reduced by 21% over the same period. pursued, in line with the International Energy CAPP believes
Canada currently produces 5mn barrels per Agency’s (IEA) 2050 net zero roadmap, which
day of oil and the CER expects this to expand to was published earlier this year, the regulator Canadian
a peak of 5.8mn bpd – unchanged from its last expects “significantly lower” Canadian oil pro-
forecast, despite it now being projected to hap- duction than in the other scenarios. producers have
pen earlier than previously anticipated. By 2050, In response to the CER’s findings, the Cana-
the regulator expects Canadian production to dian Association of Petroleum Producers’ chief the capacity
fall to 4.8mn bpd. economist, Ben Brunnen, said the regulator had to invest in
Part of the reason for the peak now coming overshot the mark when forecasting a decline in
sooner is that a rebound in oil prices in 2021 fol- Canadian oil production by 2050. CAPP believes technologies
lowing the onset of the coronavirus (COVID-19) Canadian producers have the capacity to invest
pandemic the year before is spurring near-term in technologies that will allow them to meet that will allow
investment. This is expected to help production more stringent decarbonisation policies while
grow faster than previously predicted. Addition- still growing production to meet global demand, them to meet
ally, oil sands production is anticipated to remain he was quoted by the Canadian Press as saying. more stringent
resilient over the coming 30 years, despite more “Beyond 2035, there are so many variables
aggressive climate policies and relatively low that it creates pretty substantial uncertainty. But decarbonisation
crude prices, with the CER projecting that Brent our expectation is we would not see as significant
would fall to $40 per barrel by 2050 from $68 per decline as what CER is anticipating,” Brunnen policies.
barrel on average this year. said. “I would actually expect that the Canadian
“The resilience is really owing to the unique oil and gas industry would potentially have a
nature of the oil sands, once they are built they more favourable growth profile, compared to
are very long-lived and operating costs are quite what CER is indicating.”™

P8 www. NEWSBASE .com Week 49 09•December•2021