March 23 (UPI) -- Pipelines that could take Alberta's oil out of Canadian territory could add 2 percent to economic growth in six years, the provincial finance minister said.
In an address to the provincial government on the 2018 budget, Alberta Finance Minister Joe Ceci said the economy has moved from recession to an expected growth rate of 2.7 percent this year. Outpacing most other provinces, Alberta is coming out of its worst recession in generations.
"In 2017, Alberta's economic rebound surpassed expectations," he said in his address. "Real GDP grew an estimated 4.5 per cent, with nearly every sector expanding."
Alberta dominates the oil landscape in Canada. Provincial data show total production in December was 108 million barrels, up 10.1 percent from the same month in 2016. Total yearly production was estimated at 1.1 billion barrels, up 9.2 percent from 2016.
The provincial government reported a 4.5 percent gain in gross domestic product in the fourth quarter, besting growth in the United States. Exports increased nearly 30 percent on the back of an increase in crude oil production and the provincial deficit is expected to drop $1.1 billion (USD).
Most of Canadian oil exports head south to the United States, though the Trans Mountain project from pipeline company Kinder Morgan could move more oil out of western Canadian ports. For the Keystone XL pipeline, Ceci said it was backed with a 50,000 barrel-per-day, 20-year commitment from Alberta producers.
"The addition of these pipelines is forecast to lift Alberta's GDP by about 1.5 percent to 2 percent by 2023," the minister said.
Federal regulators in February issued decisions that could let the consortium behind Trans Mountain start work in British Columbia. About half of the route for the expansion project has been approved so far, though the project faces stiff opposition from western communities concerned about the increase in tanker traffic and the heavier flow of oil.
TransCanada concluded the open season for commercial commitments to fill the Keystone XL pipeline on Jan. 18 with 500,000 bpd in firm commitments for the next 20 years, about 60 percent of the total design capacity. The company said the proposed project was contracted enough to proceed, but added it was looking to secure additional commitments.
Provincial forecasts for growth on based on a price for West Texas Intermediate, the U.S. benchmark for the price of oil, at $59 per barrel. WTI was near $65 per barrel early Friday.