Today, the Canada Energy Regulator (CER) released a report explaining the economics and market dynamics for the more than 73,000 kilometres of pipelines it regulates. The report, Canada’s Pipeline System 2021: Economics of CER-Regulated Infrastructure, provides data and trends on the movement of energy between Canada, the United States (U.S.) and the rest of the world between 2015 and 2020.
As one of the world’s top oil and gas producers, Canada produces for both domestic and international consumption with almost all of its natural gas and crude oil exports going to the U.S. Four CER-regulated crude oil export pipelines make up 96 per cent of all take away capacity from Western Canada: Enbridge Mainline, Keystone Pipeline, Trans Mountain Pipeline and Express Pipeline.
Pipelines transport virtually all of Canada’s oil and gas production and in 2020, 88 per cent of crude oil exports and 99 per cent of natural gas exports were through CER-regulated pipelines. Although no new oil pipelines came into service in Canada between 2015 and 2020, capacity on existing oil pipelines in Canada continued to expand due to a series of pipeline optimizations, and are highly utilized. Over this same period, natural gas pipelines in Western Canada underwent a number of physical expansions to relieve regional bottlenecks. These expansions have allowed Canadian crude oil production and exports to the U.S. to grow and natural gas production to remain steady.
Along with exploring how pipelines connect North American markets and the type of products being shipped, the report also provides an overview of the financial integrity of oil and gas pipelines and analysis related to the CER’s economic regulation of pipelines.
The CER produces neutral and fact-based energy analysis to inform the energy conversation in Canada. This report is part of a portfolio of publications on energy supply, demand and infrastructure that the CER publishes regularly as part of its ongoing market monitoring.
- Canada is the fourth largest crude oil producer in the world, and accounted for 5.9% of global supply in 2019.
- A total of 82% of Canadian crude oil production was exported in 2020.
- Between 2015 and 2019, crude oil production increased by 23%, from 4.0 million barrels per day (b/d) to 4.9 million b/d. Production dropped in 2020 to average 4.5 million b/d due to the pandemic.
- The COVID-19 pandemic has significantly affected the Canadian oil industry and production was cut by almost one million barrels in May 2020. Both oil production and pipeline utilization have largely recovered to pre-pandemic levels.
- Canada is the sixth largest producer of natural gas in the world and accounted for 4.3% of global supply in 2019.
- A total of 43% of Canadian natural gas production was exported in 2020.
- Canadian natural gas production averaged 15.6 billion cubic feet per day in 2019 and 2020, down 2.9% from 2018 but still approximately 5% higher than 2015 production.
- Net exports of Canadian natural gas to the U.S. have declined due to growing U.S. natural gas production displacing Western Canadian production in Ontario and Quebec.
- Canada is a natural gas net exporter with almost all natural gas exports destined for the U.S.
- Canadian natural gas liquids (NGLs) production increased from 570,000 b/d in 2015 to 720,000 b/d in 2020 due to propane and butane growth.
- In 2019 and 2021, Canada’s first and second propane export terminals began operations in the Prince Rupert area of B.C. Export terminals provide western Canadian propane producers with access to markets in Asia, and Central and South America.
Quotes
“The pipelines we regulate moved more than four million barrels of oil and 17 billion cubic feet of natural gas per day in 2020. This report provides a snapshot of the trends and economics impacting Canada’s diverse energy system over the past five years and how energy is delivered to Canadians and beyond.”
Darren Christie
Chief Economist
Canada Energy Regulator
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