Significance
Output from Canada’s oil sands is on the rise thanks to large investments made over the last decade. However, the extended price downturn has many companies rethinking their oil sands business, and the outlook for the next decade has dimmed. Oil prices in the 50-dollar range and the emergence of the US shale industry have undercut the economics of producing Alberta’s costly heavy oil reserves.
Impacts
Alberta’s oil-dependent economy could continue to struggle in the coming years as investment drops, putting pressure on Ottawa to intervene.
The construction of new pipelines will reduce demand for hitherto-booming rail transport for crude.
Canada will remain heavily reliant on the US market for its crude, a potential risk if Washington follows through on its trade talk.