Goals Are Easy — Forecasting is Hard

In the heated political debate over the future of Canada’s oil sands region, both sides point to robust production projections for its heavy bitumen-based fuel — specifically, the industry’s plans to turn out more than 5 million barrels a day by 2030.

Production of both lighter synthetic crude and heavy diluted bitumen from the oil sands neared 1.8 million daily barrels in 2012, or less than 40 percent of the 5-million-barrel goal touted by the Canadian Association of Petroleum Producers (CAPP). Keystone XL’s 750,000-ish daily barrels of oil-sands crude — a slice of its capacity being set aside for light oil from North Dakota’s Bakken play — represents only one step in that direction.

But how realistic are CAPP’s oil-sands production plans, anyway? The State Department answered that question simply in its 2,000-plus-page draft environmental impact statement on Keystone XL:

The CAPP forecasts generally have overestimated potential production compared to the trend of actual production.

How rosy are CAPP’s predictions for Canadian oil production? Check out the chart below, also taken from State’s Keystone XL report. The industry’s 2006 and 2007 reports envisioned nearly a million more barrels per day flowing out of Canada by 2012 than we’re really seeing — though the global recession that began around 2008 played a then-unexpected role in sapping oil demand.

An even better comparison, then, is between the thin gray line on the chart, which extends the current growth rate for actual Canadian oil production until 2030, and the thick blue line that represents the often-cited CAPP forecast for 2012. That’s a big gap.

capp

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