Canadian government analysts identified transportation as a major export uncertainty in the National Energy Board’s latest long-term supply and demand projections, but expect market forces to resolve the question, particularly for heavy oil, one of them told a Washington audience.
“We don’t make specific assumptions about how it will be transported, although we see it moving by rail now to pipeline terminals,” said Abra Bhargava, who leads the Energy Integration Team at NEB’s Calgary headquarters, during a Dec. 6 presentation on the forecast at the Center for Strategic and International Studies.
The analysts expect to take a closer look at long-distance rail transportation of diluted bitumen from Alberta’s oil sands in future forecasts, she said, adding, “We strongly believe the markets can function, and transportation will be found.”
That assessment differs significantly from many US environmental organizations’ declarations that crude oil production from Alberta’s oil sands won’t grow if TransCanada Corp.’s Keystone XL project and other new export pipelines aren’t built.
The new forecast, which NEB released last month (OGJ Online, Nov. 22, 2013), projects Canadian crude available for export will increase 139% to 5.5 million b/d in 2035.
Oil sands dominate the long-term production growth outlook, although NEB expects emerging tight oil production to increase through 2016 before stabilizing and declining, according to Bryce van Shuys, another analyst who co-manages the board’s Energy Futures Report.
“We believe it’s in its infancy compared to the US, and there wasn’t enough information available,” he said. “Other groups, notably [the Canadian Association of Petroleum Producers], expect tight oil production to increase over a longer period.”
When it comes to transportation, van Shuys continued, “the report’s key assumption is that energy infrastructure will be built, driven by markets.”
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