The Canadian Association of Petroleum Producers (CAPP) released its 2015 Crude Oil Forecast, Markets and Transportation report this week. While the report anticipates the recent drop in oil prices will slow Canadian oil production over the next two decades, CAPP believes the global demand for Canadian crude remains high.
According to Greg Stringham of CAPP, “demand for Canadian oil in Eastern Canada, the United States, and globally remains strong”. Demand is particularly high in Washington, California, Asia and Europe. Furthermore, the U.S. Gulf Coast provides major growth potential for Canadian oil due to its high capacity for heavy crude. However, to reach new and growing markets, all forms of transportation capacity must be increased to meet international and domestic demand.
Adds Stringham: “We have the energy the world needs – our challenge is getting it there.” According to the report, about 80% of crude shipped to refineries in Quebec and on the East Coast is currently of foreign origin, indicating that market access – in all directions – is a priority for Canadian producers. Looking long term, pipelines remain the primary form of transportation for large volumes of heavy crude. But with a number of pipelines in various stages of lengthy regulatory processes, rail transport will continue to be used to complement pipeline transport.