Oil production in Canada, the biggest supplier to the US market, is expected to grow to 4.9 million barrels a day by 2020 from last year's daily average of 2.5 million barrels, the Canadian Association of Petroleum Producers (CAPP) said in its annual production forecast. The main source of growth in the western Canadian production forecast, over the next fifteen years, comes from Alberta’s oil sands.
Bitumen production from the oil sands can be extracted using one of two recovery processes, in-situ for areas deeper than about 80 meters and with mining operations where deposits are closer to the surface. Oil sands bitumen production can be marketed as a heavy crude blend or it can be further upgraded and marketed as synthetic oil.
In 2004, approximately 65% of all bitumen produced in Alberta was upgraded to synthetic crude oil (SCO) before delivery to downstream markets. The remaining 35% was not upgraded and was blended with diluents for pipeline delivery to refineries with appropriate processing capabilities.
As oil sands output grows, conventional oil reserves are depleting fairly rapidly. Current production of 1.1 million barrels a day may decline in half by 2020.
The production forecast could be 800,000 barrels a day lower if refiners in Canada and the United States don't expand capacity to handle the new crude oil, or if adequate supplies of skilled labor aren't available to build the projects.
This is very good news for the U.S. as it is very dependent on Canadian exports for a portion of its oil supply, Canada being its number one supplier. In 2005 the U.S. imported an average of 12.4 million barrels a day, 1.6 mbd of which were from Canada and almost as much from Mexico. Based on this prediction the amount from Canada could easily double by 2020. Their are very serious environmental impacts from producing oil from oil sands, but this was ignored in this report.
CAPP releases 2006 Canadian Crude Oil Forecast, CAPP news release, May 17, 2006
Canadian Crude Oil Production and Supply Forecast 2006-2020