Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers (CAPP)
When the founding Fathers of Confederation signed the Constitution and created Canada in 1867, what did they imagine the country would look like in 150 years?
Did they see a multicultural nation of forward thinkers aiming to continually make our country a better place: an example of diversity, stewardship and innovation? If so, then mission accomplished.
We are internationally known for our intellect, open-mindedness—we’re considered among the friendliest nations in the world—and abundance of natural resources. On the latter point, Canada has it all, from forestry and agriculture to fisheries and, importantly, energy.
Canada—and North America’s—first commercial oil well was drilled in Oil Springs, Ontario in 1858. Canada has come a long way since then. From that single well established by entrepreneur James Miller Williams, we have grown to become the world’s sixth-largest oil producer and fifth-largest natural gas producer, as well as home to the planet’s third-largest oil reserves.
We are poised to grow even more. In the 2017 Crude Oil Forecast, Markets and Transportation report released in June, the Canadian Association of Petroleum Producers (CAPP) forecasts Canadian oil production will grow to 5.1 million barrels per day (b/d) by 2030. That’s up from 3.85 million b/d in 2016.
Throughout our history, the growth of our energy sector has been driven by our spirit of exploration, and a strong focus on innovation. On Canada’s East Coast, the first offshore exploration well was drilled near Sable Island, Nova Scotia in 1967. It led to the establishment of the Sable Offshore Energy Project, which has been producing natural gas since 1999.
Sable, and Hibernia—Canada’s biggest offshore oil field, which was discovered in the Jeanne d’Arc Basin near Newfoundland and Labrador in 1979—have helped create a robust offshore oil and natural gas industry in Atlantic Canada. Their success has attracted a variety of major international players to the North Atlantic, each in search of buried treasure in the form new oil and natural gas finds in the region.
The search is advanced through technologies like remotely operated vehicles and improvements in offshore drilling technology. As well, advanced methods of collecting data offshore have pointed to potential new oil discoveries—encouraging majors to make greater investments in Atlantic Canada.
On land, the advent of hydraulic fracturing, or fracking, has paved the way for future production growth. The method was first introduced in 1953 in Alberta. However, more recent advancements in fracking techniques combined with horizontal drilling have made hydraulic fracturing integral to the exploration and production of previously inaccessible shale gas and tight oil resources. Meanwhile, the use of multi-well drilling pads has greatly reduced the amount of land disturbed by drilling operations, while the use and recycling of saline water is decreasing the impact on water use.
With exploration in shale plays across Western Canada—the Montney, Duvernay and Alberta’s Deep Basin—in their early days, and established production in Saskatchewan’s Bakken play already significant, Canada is poised to lead in the sustainable production of shale gas and tight oil resources. There could also be potential from shale plays in Quebec and New Brunswick, if regulations in these provinces are updated to allow the use of this safe and proven technology.
Turning to the oil sands: although the first oil sands operation, Bitumount, dates back to 1923, it wasn’t until Karl A. Clark patented the hot-water extraction process in 1928 that the world was introduced to a new source of oil. The oil sands have since become a sizeable economic driver for all of Canada, and provide North America with a stable and reliable source of energy for generations.
Clark’s work inspired subsequent generations of scientists and engineers to find new and improved ways to extract bitumen from oil sands formations. It led to the creation of the Great Canadian Oil Sands (now Suncor Energy) in 1967—the country’s first successful, commercial oil sands mining operation.
Syncrude Canada followed suit in 1978 when it began mining operations north of Fort McMurray, Alberta. Since then a plethora of new projects—including the rise of in situ operations—has been developed throughout Northern Alberta.
The technology underlying in situ production, steam-assisted gravity drainage (SAGD), has turned the page on a new chapter in oil sands development. SAGD allows for a less-invasive method of extracting bitumen from deposits too deep underground to mine. The technology has a reduced land footprint compared with mining, and producers are reducing the GHG emissions intensity of their operations through the development of more energy efficient methods to generate steam. Companies are also investigating ways to extract bitumen with less or no water—such as using radio waves or injecting solvents underground.
Our industry’s continuous focus on innovation is highlighted by the Canada’s Oil Sands Innovation Alliance, or COSIA. Since its inception in 2012, COSIA has invested $1.33 billion to create more than 930 distinct environmental technologies and innovations to help with things like reducing GHG emissions, eliminating tailings ponds and speeding up reclamation of disturbed land.
With our first 150 years behind us, it is time Canada begins laying the groundwork for the next 150 years. While our history has made us who we are today, it’s the future of our energy industry, and the focus on innovation that will help determine who we become tomorrow. We are an energy leader. According to the CAPP-Ipsos Global Energy Pulse—a first-of-its-kind international survey about the world’s views on energy—Canada ranked No. 1 as the preferred supplier for oil and natural gas to global markets.
The world is growing and will need more energy in all forms. And the world wants more Canadian energy.
We’ve come a long way, Canada. Happy Birthday.
Tim McMillan
President and CEO, Canadian Association of Petroleum Producers
