Canada is home to the world's third-largest proven oil reserves and is the sixth-largest producer of oil.
But global economic conditions are pressuring fuel prices worldwide, and Canada's oil and gas sector has the added frustration of a deficit in infrastructure that, among other things, is driving the price of western Canadian oil down by nearly $25 from benchmark West Texas Intermediate crude.
The push for energy independence in the U.S., boosted by the growth of hydraulic fracturing and the expansion of the Bakken oil play in North Dakota and Montana, is also threatening demand for Canadian product.
A softening scene:
- The total number of workers in the oil and gas extraction sector in Canada in January was 92,800, down 16 per cent from the previous January.
- Total crude oil and equivalent exports for the year ending November, 2012, were 856 million barrels, down 7 per cent from the year before.
- Total crude oil and equivalent taken out of the ground for the year ending November, 2012, were 1.2 billion barrels, down 7 per cent from the year before.
"I think we're going to see a little bit of retrenchment (this year). … Compared to the heady years of the last decade, the margins are just very different now, with the discount for western Canadian products as well as rising costs."
– Joseph Doucet, energy economist and interim dean of the University of Alberta's School of Business
"Longer-term, there are lots of reasons to be bullish about the Canadian oil and gas industry. But for the next year or two, it's going to be a roller coaster ride. It's going to be tough in some cases to make money."
– Josef Schachter, oil and gas analyst
Stats and figures:
- Worth of Canada’s established natural gas reserves, 2011, at present value: $19.5-billion
- Worth of Canada’s established crude oil reserves, 2011, at present value: $170-billion
- Worth of Canada’s established crude bitumen reserves, 2011, at present value: $562-billion
- Electricity generated from fossil fuels in 2011, at present value: 146,291.3 gigawatt hours
Sources: Statistics Canada, Government of Canada. Some figures from Statistics Canada incorporate preliminary estimates for the latest available data.