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ENERGY: CAPP says US demand for Alberta’s crude oil to nearly double to 3.1 million b/d by 2015

            (AlbertaIndex, June 26, Tuesday) --- The Canadian Association of Petroleum Producers (CAPP) is predicting rapid increases in demand for Alberta’s oil sands in the US and Canada by 2015.

            US demand is projected to increase from about 1.6 million b/d now to almost 3.1 million b/d while Canada’s domestic demand will rise 44% from 765,000 b/d to 1.1 million b/d over the next eight years.
           
“The majority of the growth will be heavy crude oil and light synthetic. Over the same period, US total refinery demand for western Canadian crude oil is projected to increase from about 1.6 million b/d to almost 3.1 million b/d, a 100% growth. Demand for heavy crude oil is by far the largest of the crude types,” said CAPP, which represents 150 companies that explore for, develop and produce natural gas, natural gas liquids, crude oil, oil sands, and elemental sulphur throughout Canada.
            The predictions are based on CAPP’s survey of its member and refiners operating in traditional and potential new markets.
            CAPP added that the expected growth in western Canadian crude oil supply will require additional pipeline capacity to meet demand from existing and new markets.
            The refinery survey results indicate that traditional markets --- western Canada, Ontario, upper PADD II, PADD IV and Washington state in Canada and the US --- will continue to process large volumes of western Canadian crude oil.
            There is, however, potential for expansions into new markets such as Québec, eastern PADD I, southern and eastern PADD II, PADD III, California and Asia.
            The Asian market has attracted significant interest in the last few years because of its rising demand for energy and this is expected to continue.
            The US Energy Information Administration (EIA) forecasts that demand will increase from 23.3 million b/d in 2004 to 32.7 million b/d in 2020, a 40% increase. It projects that demand in China will grow from 6.4 million b/d in 2004 to 11.9 million b/d in 2020, a rise of over 85%.
            CAPP said: “This market has the potential to process Canada’s oil sands production. In fact, some of these countries are currently involved in oil sands development while others are considering acquisitions. In addition, some proponents are proposing pipelines to the west coast of British Columbia to serve this market.”
            In light of the expected growth in oil sands supply after 2011, industry will need to decide in the near future on the numerous crude oil pipeline options. The lead time to receive regulatory approvals and construct a new crude oil pipeline is at least four years.
            CAPP member companies produce more than 95% of Canada’s natural gas and crude oil. CAPP also has 130 associate members that provide a wide range of services that support the upstream crude oil and natural gas industry.
            Together, these members and associate members are an important part of a $100 billion-a-year national industry that affects the livelihoods of more than half a million Canadians.

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