CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS

The name Canadian Petroleum Association was adopted when the Western Canada Petroleum Association and the Saskatchewan Operator’s Association amalgamated in the year 1952. The association (CAPP) represents the upstream Canadian oil and natural gas and has its head office in Calgary, Alberta.

Canada produces approximately 2.7 million barrels of crude oil a day and 6.4 trillion cubic feet of natural gas per year. CAPP’s members alone produce at least 90% of Canada’s natural gas and crude oil. CAPP represents these large and small companies that participate in the exploration, development and production of natural gas and crude oil throughout Canada.

The mission is to enhance economic sustainability of the Canadian upstream petroleum industry in a safe and environmentally and socially responsible manner. This is to be done through constructive engagement and communications with the public and stakeholders in the communities in which it operates.

During its formation, some of the major objectives put in place were as follows:

  • To nurture healthier understanding between the Association and the purposes
  • To build up cooperation between the petroleum and natural gas industry and the federal, provincial and local governments and other authorities.
  • To provide a platform for the discussion of matters which affect the welfare of the members
  • To establish better understanding between the petroleum and natural gas industry and the public.
  • The Oil Challenge

    By the year 2012, Canada was third after Venezuela and Saudi Arabia in the access of global reserves. Most of the present reserves are found in remote areas making it technically complex, environmentally harsh and expensive to produce.

    In June 2013, annual forecasts released by the Canadian Association of Petroleum Producers anticipated a 30% increase in the production of oil sands production over a stretch of 3 years and a tripling over the next two decades. The output from all sources would double.

    This optimism though had to face up to the hurdles and challenges that face the Canadian oil. Such included:

  • The lack of a pipeline infrastructure or a ‘takeaway’ capacity. For the additional production, the need for quick commission of the Keystone XL pipeline arose. This pipeline would be able to channel 803,000 barrels per day of bitumen from Alberta to the Gulf Coast.
  • The occasional gaping price discount that applied to the Western Canada Select. This is to be countered by finding new markets for the industry. Travis Davis, the CAPP spokesman in 2013 said that firms need not only try and boost energy exports south of the border, but also to the central and eastern Canada and overseas to Asia.
  • The rising costs of production in Canada
  • The flight of investor money out of commodities
  • The renaissance in oil production unfolding in the United States
  • In the case that the Keystone XL pipeline fails, the plan B available would certainly be rough. Discounting of Canadian crude will be entrenched therefore threatening the economic viability of some of the higher costs oil sands mining projects.

    A lot of projects will most certainly be deferred and others completely abandoned thus limiting the excess production.