How bad was 2015 for the Canadian energy industry? Consider using a 42 percent decline in oil export revenues. Or an 88 per cent drop in propane prices. Even wind and solar capacity had an unremarkable year, despite the policy momentum in their favour.
The National Energy Board’s “Highlights of 2015” published Friday, documents the woes from the Canadian energy industry. Some factoids from the report:
HOW THE MIGHTY HAVE FALLEN
Last year, the Western Canadian oil industry eked out its smallest development in production in six years, rising to 3.66 million barrels each day. Forest fires and facility shutdowns did little to improve sentiment. Storage levels also reached an all-time high last August and remained in an elevated level throughout 2015.
As prices plunged, oil export revenues also declined 42 per cent when compared with 2014, to $41.2 billion.
Major players retreated from planned projects within the oilsands and also abandoned drilling enter in the Beaufort Sea. However, the East Coast was a rare bright spot with Shell Canada commencing an exploration program in Quebec in October – the first in the region since 2005.
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LOSING STEAM
The born-again phenomena of oil being transported on trains lost momentum last year, declining 12 per cent to 173,000 bpd. The decline was largely due to low oil prices squeezing rail’s economic viability.
“In 2014, roughly 1 / 2 of all Canadian crude by rail exports were sent to the U.S. East Coast and one-third were delivered to the U.S. Gulf Coast,” the NEB sad. “In 2015, the share of exports delivered to the Gulf Coast increased to one-half, while the share to the East Coast declined to one-third.”
LIQUIDS PULVERIZED
If you thought oil was having a terrible year, natural gas liquids fared a lot worse. Annual average prices for propane, butane and condensate in the Edmonton NGL price hub declined by 87, 54, and 46 per cent, respectively, in the past year.
“The propane market has experienced significant turbulence recently, in the crop drying and Polar Vortex-driven demand shock of 2013/14 to swelling U.S. supply and storage overhangs in 2015,” the NEB said.
GAS PAINS
Canadian gas exports to the U.S. Midwest continue to get displaced by U.S. shale resources, falling seven per cent in 2015. Canadian exports towards the Midwest have declined approximately 30 per cent since 2011, the NEB said. Overall, total Canadian gas exports in 2015 remained flat at 7.4 bcfd.
UNLIKELY Global warming LEADER
Canada’s reputation as a global warming pariah might not be entirely deserved. With all the carbon pricing policies being proposed or implemented, around 90 per cent of Canada’s population will quickly have instituted broad-based carbon pricing, the NEB estimates.
ELECTRICITY SUPERPOWER?
Canada’s electricity exports to the neighbour down south reached the record degree of 55 terrawatt hours last year.
“New U.S. initiatives to improve electricity generation from cleaner sources could create opportunities for Canadian producers,” the NEB said.
While President Barack Obama’s Clean Power Plan has been placed on hold through the U.S. Supreme Court, the march to de-carbonize power plants is unlikely to be impeded.
RENEWABLES
Canada’s renewable energy capacity grew last year, but in a slower rate. Solar capacity expanded 11 percent in the past year, compared to the galloping 48 per cent increase seen the year before. Similarly, wind capacity grew eight percent in 2015, a mere shadow from the robust 23 percent development of 2014.
“This slowdown in capacity additions can be related to slower demand growth, affordable prices, and changing incentives,” the NEB said.
yhussain@nationalpost.com
@YAD_FPEnergy
