The oil sands are a vital energy source for Canada and the world. The world relies on an energy mix that includes oil, coal, natural gas, hydro, nuclear and renewables.
Canada is uniquely positioned to supply an abundance of safe, secure energy as fossil fuels will satisfy the vast majority of growing global demand – which will grow as economies grow and standards of living improve.
The International Energy Agency's (IEA) World Energy Outlook 2016 predicts continued growth in global energy demand by 2040 and continued reliance on fossil fuels. Hydrocarbons are forecast to remain the world’s dominant source of energy, meeting 74 per cent of the world’s energy needs by 2040. The IEA says Canada is expected to be fourth in oil production growth over the forecast period, after Iraq, Brazil and Iran. As the IEA reports, Canada has the energy the world needs – our challenge is to move it to new customers in new markets in the years ahead.
Highlights from the November 2016 report include:
- China is forecast to become the world’s largest oil-consuming country by the 2040.
- U.S. oil production is forecast to rise to 14.7 million barrels per day in 2025 and gradually decrease to 12.8 million barrels per day by 2040.
- Canada is forecast to be fourth in oil production growth between 2015 and 2040, after Iraq, Brazil and Iran.
- Steady growth is forecast for Canadian oil production to 6.1 million barrels per day by 2040.
- Canadian oil sands production is forecast to grow from 2.4 million barrels per day in 2015 to 3.8 million barrels per day in 2040.
With consumption rising worldwide and conventional oil supplies declining, the need for a secure supply of oil from unconventional resources like Canada’s oil sands will continue to increase. With the majority of reserves located in the oil sands, the resource has potential to become a key global supplier.
Canada and the U.S.
The United States and Canada share the world’s largest and most comprehensive trading relationship. Energy is a major part of this relationship as Canada is the single largest foreign supplier of energy to the United States. Canada is uniquely positioned to contribute to meeting growth in U.S. energy demand.
Canada is the largest supplier of crude oil and petroleum products to the U.S., with the oil sands being the largest source. Growing domestic supply helped Canada overtake the Organization of Petroleum Exporting Countries (OPEC) for cumulative U.S. imports by the end of 2014.
Oil sands reserves have helped diversify global supply, reduced reliance on more distant sources of oil and improved North American energy security – while supporting economic growth in Canada and the U.S. U.S. crude oil exports to Canada were 10 times higher in 2015 than five years ago. Meanwhile, Canadian oil exports to the U.S. have increased by about 40 per cent over the same time frame. Even with increased domestic oil supply, the U.S. will need to import oil. It’s not about how much oil the U.S. uses – it’s about the source of the oil.
Canada’s oil and natural gas industry provide economic benefits across North America. More than 1,900 American companies directly supplied the oil sands and pipelines companies in the past two years. These included construction, electrical, engineering and equipment services (Source: CAPP). Canadian oil will find new paths to U.S. markets and continue to create jobs and wealth for Canadians and Americans.