Posted on Tuesday, January 26, 2016 - 07:56 by David B. Layzell, PhD, FRSC , Bastiaan Straatman, PhD, Mark Lowey, BA
For many years, governments in Canada and Alberta have predicted a prosperous future based on sustained pricing of about $US90 per barrel for West Texas Intermediate (WTI) crude oil. Such a price had been predicted to drive oil sands production to more than 5 million barrels per day by 2040, from the current level of approximately 2.3 million b/d. As a result, Alberta’s population was estimated to rise to about 6.2 million people (currently 4.1 million) by 2040 and deliver a provincial GDP of more than $380 billion per year (currently approximately $215 billion/yr).
Such high oil sands growth (HOSG) projections do not seem realistic in 2016, with WTI prices now under $US35 per barrel and Canadian bitumen discounted by at least $15 per barrel on that price – with no respite in sight. Clearly, a low oil sands growth (LOSG) projection may provide a better window on the future, especially when these projections are needed to inform economic and environmental policies, including those guiding the transformation of our energy systems to reduce greenhouse gas (GHG) emissions and meet climate change commitments.