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Oil production booms in Alberta

Daily crude oil production in Alberta has increased in 2022 amid high demand and high price environment, according to economists.

Between January and June, Alberta oil sands produced an average of 3.6 million barrels of crude oil per day up by 100,000 barrels from 3.53 million barrels produced daily for the same period in 2021, according to ATB Deputy Chief Economist Rob Roach.

"Alberta is doing its part to try to get more oil into the market. And also to take advantage of the higher prices that are out there," said Roach.

This is the first time average output has been this high over this period and so far in 2022, the oil patch has produced a record-breaking 654 million barrels, said Roach.


"It does have a ripple effect out from there that is generally positive. More activity, more jobs, that's good for the Alberta economy," said Roach.

Another energy analyst says record-setting oil production during a period of high oil prices will directly benefit the Alberta economy in terms of royalties to the province.

Jeremy McCrea, managing director of energy research at Raymond James estimated royalty revenues could range from $20 to $30 billion, as it depends on the on the rate paid by the energy company which could reach 40 per cent amid high market prices.

McCrea added that energy companies are capitalizing on the market conditions, after many Calgary-based producers posted very flush second-quarter profits.

"It's like the saying 'make hay when the sun is shining.' These companies are looking at the profitability. If they spend say $10 million on (an oil well), it looks like they are getting payout on that well within three to four months here," said McCrea.

However, he said the market continues to be unstable, because of global factors like inflation, supply chain disruption, and energy supply concerns amid sanctions against Russian oil.

"So with every piece of economic news that comes out, you can see the price of oil moving up and down, because that potentially is going to reflect how much demand is out there," said McCrea.


The Alberta Premier's Office said in a statement: "Alberta has repeatedly broken records for growth this year, with the highest-ever recorded levels of oil and gas production, oil and gas exports, and record levels of investment in other sectors such as tech and film.

"This means heightened investment, restored investor confidence, and above all new jobs for Albertans," said Justin Brattinga.

A spokesperson for Energy Minster Sonya Savage told CTV News the latest production numbers indicate how resilient Alberta's energy sector is after recovering from the economic downturn between 2014 and 2019.

"This (record-breaking output) demonstrates Alberta’s ability to help meet global energy demands. This is also good news for Alberta workers and their families who will benefit from the success of the energy sector," said Alex Puddifant.

He added, "to ensure long-term success and stability for our energy sector, Alberta’s government will continue to show leadership on North American and global energy security and advocate for greater market access for our energy products."


ATB analysts said the record-breaking output is not likely to reflect a long-term boom.

"Between pipeline and rail, we can only move so much oil to market. That really forms a bit of a hard cap on production growth," said Roach.

However, one of the major industry associations said export capacity in Alberta is improving.

"Today, Canada is approaching record oil production, thanks to the additional export capacity brought on by Line 3, which started at the end of 2021 – moving record high exports to the United States and contributing to the global supply," said Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers (CAPP).

Baiton also referenced the TMX expansion project which is expected to increase transportation capacity of 590,000 barrels per day bound for international markets.

"Our recent growth in exports demonstrates the potential for Canada to play a larger role in meeting global oil demand. Growing our transportation capacity creates opportunity for growth in our industry which translates into jobs and revenues to governments while providing responsibly-produced energy to our allies around the world."

Baiton then added, "With a relatively small population but with the third largest oil reserves on the planet — larger than Russia’s proven reserves – Canada has great potential to become a preferred global supplier of energy.” Top Stories

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