Stampede Drilling Rig 22 near Lampman on Jan. 27. Photo by Brian Zinchuk

CALGARY — The oil industry is planning on spending just a wee bit more on capital this year compared to last.

The Canadian Association of Petroleum Producers (CAPP) is forecasting capital expenditures for the upstream oil and natural gas sector will reach $40.6 billion in 2024, rising slightly from an estimated actual investment of $39 billion for 2023.

These numbers do not include the cost of the Coastal GasLink or Trans Mountain Pipeline Expansion, nor do they include LNG Canada.

“Upstream oil and natural gas producers are staying disciplined, with capital expenditures expected to remain stable in 2024,” said Lisa Baiton, CAPP president and CEO in a Feb. 27 release. “There is room for cautious optimism with current Canadian oil production at record levels in anticipation of the Trans Mountain expansion completion in the second quarter. We are also moving closer to seeing the completion of Canada’s first globally significant liquefied natural gas export facility in British Columbia, expected in 2025.”

“Despite these positive trends, there remains a sense of caution largely due to the ongoing uncertainty surrounding proposed emissions policy in Canada, which continues to be a significant factor in investment decisions,” added Baiton.

Indeed, Saskatchewan Minister of Energy and Resources Jim Reiter sent two letters to federal Minister of Environment and Climate Change Steven Guilbeault on exactly that point, noting that the proposed emissions cap could reduce Saskatchewan oil production by 20 to 30 per cent, or 100,000 to 150,000 barrels per day from a current level around 454,000 barrels per day.

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The disciplined business approach and modest production growth in recent years has yielded significant returns to the Canadian economy, CAPP said, representing $111 billion in gross domestic product (GDP) and $45 billion in revenues to municipal, provincial, and federal governments, supporting communities, infrastructure, and energy affordability across the country.

“Energy production and export is the backbone of the Canadian economy,” says Lisa Baiton, CAPP President & CEO. “Hundreds of thousands of Canadians directly and indirectly rely on the industry for work, enabling thousands of families and businesses, including hundreds that are Indigenous owned, to improve their lives and prosperity.”

To that end, Reiter’s letter to Guilbeault noted that oil and gas is the largest industry in Saskatchewan, as measured by gross domestic product (GDP). A query to the provincial government by Pipeline Online confirmed that, showing oil and gas eclipses even agriculture in Saskatchewan for GDP share.

The oil and natural gas industry is among the largest investors in emissions reduction technologies in Canada and investments are expected to accelerate this year to advance emissions reductions projects, CAPP said.

It noted, “Emissions from oil and natural gas production peaked in 2015. From 2012 to 2021, the conventional upstream sector lowered CO2 equivalent emissions by 24% while growing production by 21%. The conventional upstream sector has also reduced methane emissions and is on track to exceed the current federal government target of a 40 to 45 percent reduction by 2025. In addition, with anticipated co-funding from governments the country’s six largest oil sands companies expect to invest $24 billion in emissions reduction projects by 2030 and are targeting net zero emissions from operations by 2050.”

CAPP added, “Canada’s oil and gas sector spends more than any other industry in Canada on environmental protection — $9.4 billion cumulatively from 2018 to 2020 — accounting for 33 per cent of total environmental protection expenditures made by business across Canada.”

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  • 0064 Estevan OTS
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