After a flurry of pessimistic forecasts about the future of Canada's oil heartland, the country's Conference Board surprisingly had something optimistic to say about the province in its Canadian?
After a flurry of pessimistic forecasts about the future of Canada's oil heartland, the country's Conference Board surprisingly had something optimistic to say about the province in its Canadian Outlook Summary: Winter 2020.
According to the report, over the next four years oil production in Alberta will grow by 4.2 percent annually and it will not even need new pipelines for that. Pipeline optimization will do the trick: TC Energy (formerly TransCanada) and Enbridge are both working on reducing drag inside their pipelines, which could boost flows by up to 150,000 bpd by early next month, the author of the report, the Conference Board's director of forecasting and analysis told CBC News.
"We think this is going to be a bit of turning point for Alberta in 2020," he said, adding "Now, investment is still much, much lower than it was in 2014. So we have to keep that in context. But the improvement in takeaway capacity will encourage some improvement in investment. And we think that should drive GDP to?? the top of the charts in Alberta in 2020."
It's worth noting, however, that the Canadian Conference Board's forecast includes assumptions about Enbridge's Line 3 replacement and the Trans Mountain expansion. The outlook for Line 3, which after the replacement of the pipes will reach its full capacity of 760,000 bpd. Currently, the flow of oil through the pipeline is half that for safety reasons.
Related: Revealing The True Extent Of Exxon's Natural Gas Blow Out
The outlook for Trans Mountain, on the other hand, remains shrouded in uncertainty. The latest blow to the project that the Canadian federal government had to buy from Kinder Morgan came from a First Nations group that claimed to the Federal Court of Appeals they had not been consulted properly by the authorities regarding the project.
Yet if a miracle happens and the Trans Mountain's expansion takes place, this will add another 590,000 bpd to Alberta's takeaway capacity. As such, the project would certainly be instrumental to the province's economic well-being.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
The Best And Worst Oil Predictions Of 2019
US Proved Oil & Gas Reserves Hit New Record High
Revealing The True Extent Of Exxon's Natural Gas Blow Out