Oil production forecast for Canada lowered

CALGARY, Alberta, June 10 (UPI) -- While demand for Canadian oil remains strong, an industry group said the low price for crude oil forced it to cut its production estimates for 2030.

The Canadian Association of Petroleum Producers said it estimated Canadian oil production would reach 5.3 million barrels per day by 2030, up from the 3.7 million bpd produced last year. In June, when crude oil prices were $40 more per barrel, CAPP estimated 2030 output at 6.4 million bpd.

"While the two forecasts are similar during the early years of the forecast period, the slower pace of production in the latter years is the result of reduced capital spending intentions due to the sharp decline in global oil prices," the association said.

CAPP in May said it expected industry spending to drop by more than $20 billion. So far, the group said more than 20,000 people have lost their jobs as a result of the slowdown in the global energy sector.

The International Energy Agency said it expects global demand to increase in the coming years, a sentiment backed by the Organization of Petroleum Exporting Countries. CAPP Vice President Greg Stringham said that, although Canada has the third largest deposits of oil in the world, its oil represents only a small fraction of all the oil consumed around the world.

The United States is the primary export market for Canadian crude oil. The federal government, however, has courted Asian and European leaders in an effort to expand its energy reach.

"We have the energy the world needs -- our challenge is getting it there," Stringham said. "Connecting Canada's growing supplies to these markets safely and competitively is a top priority."

Most of Canada's oil is in the form of a heavier grade dubbed oil sands, a type viewed as more of a threat to the environment than others. Those concerns have presented obstacles to pipelines ranging from Keystone XL, a pipeline planned through the United States, to Energy East, a project meant for Canada's eastern markets.

CAPP expects oil sands production to reach 4 million bpd, conventional oil to 1.3 million bpd and offshore to 91,000 bpd by 2030.