CALGARY – Growth in Canadian oil production could slow down or come to a “complete standstill” once projects now under construction are built, the International Energy Agency warns.
The Paris-based organization released a report Monday examining global oil production forecasts over the next five years.
By 2021, Canadian oil output is expected to average 5.2 million barrels a day, which would represent an increase of 800,000 barrels a day, the report said. But a number of factors are prompting energy companies to reconsider expansion of production, the IEA said.
“Heightened environmental concerns, a lack of pipeline access to new markets and the unknown impact of the victory by the New Democratic Party in Alberta’s elections last year are causing companies to slow development,” the IEA said.
“As such, we are likely to see continued capacity increases (in) the near term, with growth slowing considerably, if not coming to a complete standstill, after the projects under construction are completed.”
Since mid-2014, crude prices have plunged by 70 per cent. On Monday, oil was trading above US$33 a barrel.
The IEA said a number of new developments in Canada recently commissioned or nearing completion will drive growth over the next five years, including the Kearl expansion project in Alberta, which was completed in June 2015, and the Hebron offshore oil site off Newfoundland set to begin production in 2018.