- Canada is increasing oil production rapidly:
One of the largest positive forces driving Canada’s economy is oil production and a recent oil production forecast from an analyst at CIBC World Markets captures show just how much oil production could increase. This latest forecast of Alberta oil sands production of 4.1 million barrels per day by 2020 is higher than the forecast made by the Canadian Association of Petroleum Producers (CAPP) that expected a more modest increase of 1.4 million barrels per day, reaching a total of 3 million barrels per day by 2020. But, just using the CAPP forecast, industry and government analysts expect Canadian oil production to bump up against current pipeline capacity by 2015 or 2016.
- Canada is building new pipeline infrastructure, for example:
Enbridge is planning to spend C$3.2 billion ($3.15 billion) on pipeline expansions, mostly to get oil from Alberta and North Dakota to refineries in the U.S. Midwest and in Eastern Canada. East coast refineries are currently fed by foreign oil , which are more expensive than U.S. benchmark prices. According to Stephen Wuori, the head of Enbridge’s liquids pipeline business, “Refineries in Ontario and Quebec are paying premiums of $20 per barrel or more to obtain crude oil from the foreign sources they are currently largely dependent on. Access to Canadian and U.S. Bakken production will help level the playing field for these refineries, protecting their long term viability and safeguarding jobs.” The expansions are expected to be completed in 2014
- The government has streamlined the steps for approval of new energy development:
Thus, three proposed pipelines, TransCanada Corp’s Keystone XL pipeline to Texas, Enbridge’s Northern Gateway pipeline to the Pacific Coast, and Kinder Morgan’s Trans Mountain Project are needed to transport the crude to buyers. Due to opposition to pipeline construction from environmental organizations, the national government is revamping legislation on environmental assessments for major energy projects. The government has concluded that existing laws have granted too much power to delay needed infrastructure by groups simply opposed to energy production.
- Moving to diversity its energy trade partners because of President Obama’s rejection of the Keystone XL pipeline.
Currently the United States is Canada’s largest export market for oil and Canada is America’s largest single source of imported oil. However, because President Obama “delayed’ the Keystone XL pipeline decision despite three years of study and subsequently found that the pipeline was not in the national interest, Canada has decided to ship more oil to China and other Asian countries. It intends to press forward with a pipeline to Asia.
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