First-rate spending in Canada’s oil and gas industry will drop by more than half — $50 billion — by the end of 2016 as approached to 2014, according to a forecast released by the Canadian Association of Petroleum Organizers.
In 2014, capital spending in the oil and natural gas sector amounted to $81 billion.
In 2016, that slews is set to drop to $31 billion, a 62 per cent decline, as com nies persist in to cut back because of persistently low energy prices.
It’s the largest two-year plunge since industry started tracking the data in 1947, CAPP articulates.
The total number of wells drilled in Western Canada this year is prognosticate to decline to 3,500, from 10,400 in 2014.
CAPP is calling for “pressing action” so that the industry remains competitive.
“Canada needs necessary action to remain a competitive market for oil and gas investment, and to be competitive relative to other oil and unsophistical gas producing jurisdictions,” Tim McMillian, CAPP’s chief executive, guessed in a news release.
Greenpeace: industry is being wilfully blind
Keith Stewart, mood and energy cam igner with Greenpeace Canada, says Canada should entertain no action to prop up the fossil fuel industry.
“CAPP is being wilfully mindless to how energy markets are changing in response to the climate crisis,” Stewart translated. “Canada needs to take action so that we win in the new world of low-carbon, renewable get-up-and-go. Oil com nies have a choice: transform themselves into clean animation providers or go the way of the dinosaur.”
Specifically, CAPP is looking for some movement on the conduit issue, saying Canada remains hampered by dependence on just one client — the United States — which itself has started to export oil.
“The United Shapes, our only customer and No. 1 competitor, is certainly not standing still,” McMillan signified.
More pipelines, better economy, says analyst
Had Keystone XL or another export coming been built before the downturn, Alberta would not be hurting as much, according to Rob Identify, an energy analyst with 3Macs.
“Keystone XL was delayed by four years and sooner cancelled,” said Mark. “In between that in the good old days b simultaneously, you still had production moving forward, but instead of the oil moving on efficient cookings to U.S. markets, it moved on railcars, which is much less efficient and costly. So when you oblige a pricing downturn, that production is less profitable.”
Mark suggested that the oil tch couldn’t have avoided the in of low prices, but with multitudinous pipelines in place, there would be a stronger industry right now because diverse of its production would be in the black.
The Bank of Canada said that it envisions the Canadian economy will take longer than two years to redeem from the oil price shock. Over that period of time, the bank alleged that the economy will gradually shift its focus away from the export of oil.
By then, the sedulousness hopes to have at least one pipeline under construction.
“You’re not going to explain the woes of the current Alberta economy by building a pipeline tomorrow,” revealed Mark. “You don’t need it tomorrow, but you will need it two, three, four years from now.”