Crude oil production in Alberta reached a record high in the first half of the year, at 3.6 million bpd, which was 100,000 bpd higher than the average output for the first half of 2021.
CBC noted in a report on the news that production from oil sands accounted for some 85 percent of the total output during the period, according to ATB Financial. Yet the financial services provider noted that while most of the total came from the oil sands, production from conventional resources increased more substantially.
Oil sands accounted for 24,000 bpd in the overall output increase, while conventional oil accounted for 62,000 bpd.
"You can incrementally respond quicker because it's about taking a rig, putting it out there and drilling it," market analyst Kevin Birn said, as quoted by CBC. He said he expected production to rise even further in the second half of the year.
Over the longer term, however, the outlook is more vague, not least because of government efforts to enforce a cap on emissions from the industry, which accounts for the biggest part of Canada's total emissions.
Ottawa is planning to make the oil and gas industry reduce its emissions by 40 percent by 2030, with the most recent tactics discussed involving a cap-and-trade system or a new carbon pricing system.
Meanwhile, Rystad Energy has forecast that Alberta could turn into Canada's biggest renewable energy producer, thanks to its unregulated market, natural resource wealth, and a skilled energy workforce.
"Canada is no stranger to renewables, but Alberta has been a minor player until now. That's about to change. The region's unregulated power market, minimal regulatory hurdles and abundant natural resources make it an attractive prospect for developers, in addition to an existing workforce of industry professionals increasingly eager to adapt to green energy. Other provinces may want to follow suit if they have ambitions to attract lucrative green investments," said Rystad analyst Geoff Hebertson.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More