'One of the most pivotal moments': CAPP releases 2023 oil and gas forecast

A pumpjack draws out oil and gas from a well head as the sun sets near Calgary, Alta., Sunday, Oct. 9, 2022. Canada has the third largest oil reserves in the world and is the world's fourth largest oil producer. THE CANADIAN PRESS/Jeff McIntosh

Analysts say Canada's oil and gas industry will hit $40 billion in total investment in 2023, an increase of 11 per cent from last year.

The forecast from the Canadian Association of Petroleum Producers (CAPP) says the investment will be funnelled into a number of businesses throughout the year. It says many of those organizations are Indigenous-owned and focus on issues like environmental performance.

"Investment into Canada's oil and natural gas industry circulates back into the economy, benefitting all Canadians," said CAPP president and CEO Lisa Baiton in a release.

Baiton says oil and gas production will continue to bolster royalty and tax revenues for multiple levels of government, which can then be used toward hospitals, schools, social programs and other infrastructure.

Alberta's share of investment is expected to be $28 billion this year, representing approximately 70 per cent of Canada's total. Investment growth is mainly being driven by conventional and oil sands sectors, CAPP says.

The province's high royalty revenues were the main source of income that contributed to the UCP government's $10.4 billion surplus last year, which, in turn, helped support its spending commitments in Tuesday's budget.

Those same revenues are expected to provide Alberta with a $2.4 billion surplus this year.

CAPP says spending will be also focused on the development of emission reduction technologies, such as carbon capture utilization and storage.

"A report issued by BMO Capital markets showed Canadian oil and natural gas producers have invested an average of $1.2 billion annually since 2012 into research and development, much of that focused on reducing emissions," it said.

"The report estimates in 2022 that investment rose to $1.4 billion and could exceed $2 billion by 2025."

CAPP contends Canada's upstream oil and natural gas industry is the largest investor in environmental protection, providing $3 billion annually toward initiatives such as biodiversity habitat protection, air quality management and water protection.

"The year 2023 may be one of the most pivotal moments in time for Canada's oil and natural gas industry," Baiton said.

"With an emerging liquefied natural gas export industry, the expected completion of the Trans Mountain pipeline expansion and billions of dollars in emissions reduction investments waiting to be unlocked, Canada is positioned to play a much larger role in providing responsibly produced energy resources to the world."