Three, five and 10-year megatrends
"Project 3-5-10" was conceived in 2013 to identify emerging megatrends that individually or in aggregate have the potential to transform and/or disrupt business practices in the upstream oil and gas industry three, five and ten years from now.
The project is led by Peter Tertzakian at ARC Financial Corp, and is guided by a steering committee with representatives from government and industry associations, including CAPP. The project consists of a series of stakeholder roundtables designed to elicit feedback on emerging issues and trends, with this information applied to future growth scenarios to understand the potential impact and severity of these trends on Canada's upstream oil and gas industry.
The intent of "Project 3-5-10" is to create a continuous process of ongoing monitoring and review so as to stay on top of key developments in the industry.
Canada's oil industry is facing a number of challenges tempering long-term growth prospects, including uncertainty related to provincial and federal climate change policies in Canada, potential protectionist policies in the U.S., and diverging regulatory inefficiencies between Canada and the U.S. CAPP estimates a 53 per cent increase in oil sands production, while conventional oil production is expected to remain flat. Against this backdrop, highlights of this year’s outlook are:
- Total Canadian production grows from 3.85 million b/d in 2016 up to 5.1 million b/d in 2030.
- There is an urgent need for new pipelines to ensure Canada remains globally competitive. It's imperative we get our oil to markets in all directions to ensure fair market value, and provide the world with safe, reliable and secure energy from Canada.
- The overall projected growth will exceed existing pipeline transportation capacity, highlighting the need for pipelines heading east, west and south. Today, the pipeline network can transport 4 million b/d of oil and oil products but by 2030 it will need to move more than 5.5 million b/d.
- Capital spending in the oil sands is expected to decline for the third consecutive year to $15 billion in 2017 from $34 billion in 2014.
- Drilling by conventional crude oil producers is forecast to increase 70 per cent compared to 2016 levels, but will still be 40 per cent lower than in 2014.