Canadian Association of Petroleum Producers

The pace of the booming oil sands expansion is threatening to be slowed by high costs and transportation issues.  The return on investments are going to be looked at for a long time as global producers try to weigh their options.  The Canadian Association of Petroleum Producers (CAPP) have lowered there growth forecast and increasing concerns about delays and competitiveness amongst parties has caused CAPP to lower their projections.

maritimedrillingschool_pipeline Still, expected growth has been expressed by CAPP, saying that they believe come 2030 that oil sands output will go from 1.9 million barrels a day in 2013 to 4.8 million.  Usually conventional crude production would be expected decline as a result but CAPP is predicting it will grow by 200,000 barrels a day every year for the next 17 years.

The oil sands slowing down is really a result of two things, according to The Globe and Mail .  First, capital costs are rising, especially in Alberta.  Second, there is a strong worry that pipelines that are critically needed will not get built.  These concerns came from CAPP Vice President Greg Stringham.

The forecast of the industry also comes with the government’s preparation to announce their decision on the Enbridge Inc.’s Northern Gateway pipeline that has been shrouded in controversy.  The pipeline would carry 520,000 barrels per day from the oil sands bitumen to British Colombia’s coast from shipments to Asia-Pacific markets.  If the project gets the green light and Ottawa decides it feasible, Enbridge will have a long road ahead to get confirmation from First Nations communities, they will have to meet all the regulatory conditions and no doubt they will need to handle the countless lawsuits that will come from the project.

CAPP’s estimate, considered bullish by The Globe and Mail, will require a greater rail capacity and need for more pipeline access.