New Record on Alberta’s Oil Output

According to a report by ATB Economics, oil production in Alberta reached a new record in the first half of 2022.

Between January and June, daily output reached 3.6 million barrels a day, up from 3.5 million barrels in the first half of 2021.

According to ATB, oilsands production accounted for 85% of overall production. However, conventional production expanded faster. Production from oilsands increased by 24,000 barrels per day compared to 2021 while conventional production increased by 62,000 barrels per day.

According to market analyst, Kevin Birn, the increase in conventional production is in direct relation to the rising price of oil.

“You can incrementally respond quicker because it’s about taking a rig, putting it out there and drilling it,” said Birn.

Birn explained that the slower growth in the oilsands was the result of more efficiency and capacity being built up over the past decade.

According to Kent Fellows, an assistant professor at the University of Calgary School of Public Policy, the long-term picture is unclear, especially considering activities around climate legislation in Canada and the U.S.

He said the new US Inflation Reduction Act, allocates $369 billion USD to fight climate change and may reflect a long-term shift in US demand for crude oil.

Canada’s federal government is now holding consultations on a potential emissions cap for the oil and gas industry.

“There’s a big question mark there about how that’s going to affect that sector, and if it does affect that sector and it does lead to, say, production cuts, what that means for not just the Canadian economy but the Alberta economy in general,” said Fellows. 

Original source material for this article taken from here