Canadian oil output to peak 7 years sooner than previously forecast, regulator says (updated)

Canada Energy Partners

09/12/2021 16:59

(Adds projections on oil prices, production)
    By Nia Williams
    CALGARY, Alberta, Dec 9 (Reuters) - Oil output in Canada,
the world's fourth-largest producer, will climb over the next
decade and peak at 5.8 million barrels per day (bpd) in 2032,
seven years sooner than previously forecast, the Canada Energy
Regulator (CER) said on Thursday.
    The CER said a rebound in oil prices after the
pandemic-related crash last year meant more near-term investment
would help production grow quicker than previously anticipated,
before it starts to slowly decline to 4.8 million bpd by 2050.
    The level of anticipated peak production is unchanged from
last year's projection. Canada's current production is 5 million
bpd.
    The CER said oil production is likely to remain resilient
over the next three decades, despite relatively low oil prices
and steadily more ambitious climate policies, thanks to northern
Alberta's vast oil sands deposits, which account for nearly
two-thirds of Canadian production.
    "The resilience is really owing to the unique nature of the
oil sands, once they are built they are very long-lived and
operating costs are quite low," Darren Christie, the CER's chief
economist, said in a news conference.
    "The vast majority of oil sands production we have in 2050
is coming from facilities that are already producing today."
    The projection is part of the CER's central "Evolving
Policies" scenario, which expects action to cut carbon emissions
from global energy systems will continue at a pace similar to
that seen recently.
    Under a scenario in which climate policies do not evolve,
the CER expects higher oil prices and Canadian production to
rise faster until it reaches a plateau of 6.7 million bpd in
2040.
    In the central scenario, Canadian natural gas production is
expected to remain close to current production levels of 15.5
billion cubic feet a day (bcfd) over the next two decades,
before declining to 13.1 bcfd by 2050.
    Energy use in Canada is projected to fall 21% by 2050 as
energy efficiency improves, and CER expects carbon capture and
storage to play an increasingly important role in helping cut
emissions.
    The regulator said Canada's fossil fuel use without carbon
capture and storage to sequester the emissions will fall 62% by
2050. Overall fossil fuel use is expected to decline 40% by that
year, but the regulator said the country will not be able to
achieve net-zero emissions unless it makes more drastic changes.

 (Reporting by Nia Williams; Editing by Jonathan Oatis,
Marguerita Choy and Paul Simao)
 ((nia.williams@thomsonreuters.com; +1 403 531 1624; Reuters
Messaging: nia.williams.thomsonreuters.com@reuters.net))