FOR IMMEDIATE RELEASE
13 June 2017
Greg Muttitt, Greg[at]priceofoil.org, UK: +44-7508-421-527
Lorne Stockman, Lorne[at]priceofoil.org , US: 540 679 1097
Oil Change International responds to CAPP annual forecast
In response to the Canadian Association of Petroleum Producers annual forecast, Greg Muttitt, Senior Campaign Advisor at Oil Change International, released the following statement:
“The CAPP magicians are at it again. Their forecast paints a picture of an industry being held back by a lack of pipelines and unfair regulations. But CAPP’s report is a work of fiction: its numbers are demonstrably wrong, and have apparently been made up to prop-up a struggling political argument for more pipelines.
“CAPP’s alternative facts miss the reality that capital investment is drying up in the tar sands, as major oil companies leave the province. The tar sands business model is no longer considered viable by the industry. The latest industry data is clear that the era of growth in the tar sands is ending.
“This delusion that the tar sands have a growing future is only hurting communities, workers, and Canadians. We need strategies for a just transition and a diverse, stable economy. The longer we delay the more it will hurt.”
- CAPP claims the pipeline system is ALREADY full – if this were true, it would drive down Canadian oil prices, which is not happening.1
- CAPP claims the capacity of the Enbridge Mainline system actually DECREASED since a year ago, in spite of major expansion works that have taken place.2
- CAPP has incorrectly claimed Canada was about to run out of pipeline capacity, every year since 2012.3
- In reality, there is ample space in the pipeline system for the new production currently being developed, which is likely to establish the high-water mark for the tar sands.4
1: CAPP says current supply ALREADY exceeds takeaway capacity (Figure 4.4), a demonstrably false claim. If that were true, Western Canadian Select oil would be trading at a massive discount to West Texas Intermediate, as it did when the pipeline system was full in 2013 and 2014. The current difference between WCS and WTI is at its usual level, which is due to quality and geography. See http://economicdashboard.alberta.ca/OilPrice and https://rbnenergy.com/the-thrill-is-gone-does-slow-growth-in-oil-sands-output-justify-new-pipeline-capacity
CAPP also understates capacity of refineries in Alberta, COMPARED TO ITS OWN STATISTICS (its statistics handbook gives capacity of 610 kbd; this report claims 520 kbd)
2: Enbridge’s Line 61 expansion – between Superior, WI, and Flanagan, IL – was completed in late 2016, to remove the largest bottleneck on the company’s pipeline system. Yet CAPP has REDUCED its estimate of the Enbridge system’s effective capacity, from 2,470 kbd in its June 2016 report (Figure 4.4) to 2,307 kbd now (Table 4.1).
3: See http://cappmath.ca/
4: See https://priceofoil.org/2016/10/18/brief-canada-not-running-out-of-pipeline-capacity/