Daniel Yergin, CERA, and the new O-15
Ashok Dutta
CanWest News Service
Friday, March 23, 200
CALGARY -- Canada has been ranked fifth in a new global oil grouping unveiled Thursday by an independent energy analyst in testimony in Washington to the U.S. House Committee on Foreign Affairs.
Called Oil-15, or O-15, the new order put together by Daniel Yergin, chairman of Cambridge Energy Research Associates, includes all OPEC states — barring Indonesia — and includes five others that have the highest potential to increase supplies by 2015. Besides Canada, they are Azerbaijan, Kazakhstan, Brazil and Russia. The group is projected to produce 72.7 million barrels per day, or 69 per cent of total global oil output.
“It is a straight forward grouping of producers that are planning major investments and do not necessarily have a political agenda,” Guy Caruso, administrator of Washington-based watchdog Energy Information Administration, said in an interview.
Saudi Arabia was ranked No. 1. Its output was forecast by Cambridge to grow to 14.3 million barrels per day from 2005 output of 12.7 million bpd. Russia was in the No. 2 spot, and was forecasted to see production grow to 11.5 million bpd from 9.6 million. Iran was No. 3, with output forecast to grow to 4.3 million bpd from 5.7 million bpd, and Iraq No. 4, with output forecast to grow to 5.5 million from 2.6 million.
Next came Canada, with production forecast to grow to 5.3 million bpd by 2015 from 3.5 million bpd in 2005.
“We will see a concentration of growth in liquid production capacity within the O-15,” said Yergin, who was asked to make the presentation on energy security.
“After two decades of working off excess capacity, global energy supply is now dominated by the growth challenge.”
Canada, with over $125 billion investments in the Alberta’s oilsands sector, is set to play a central role in meeting U.S. energy demand. Last year, the largest share of American’s energy imports came from Canada, Yergin said.
Greg Stringham, vice-president at the Canadian Association of Petroleum Producers, said the testimony is a recognition of Canada’s importance both now and in the future for delivering energy supplies.
“Canada is the most secure source and will continue to maintain its lead position,” he said.In 2006, Canada exporting 2.29 million bpd of crude oil to the U.S., accounting for 17 per cent of total imports. This was followed closely by Mexico at 13 per cent. Until a few years ago, Saudi Arabia was the principal supplier of Arabian Light and Super Light grades of crude to the U.S. The call on Canadian crude is likely to increase, if a statement issued Wednesday by Mexico’s Pemex on a 5.8 per cent dip in its proved oil and gas reserves is any indication.
However, from an energy security perspective, a question remains to what extent.
“From an energy security perspective, there will be a limit. But, it is still too early days to talk about it,” Caruso said.
Stringham felt that if the O-15 group were drawn up on a political-stability basis, Canada would have been on the top.
“The U.S. has made it amply clear they do not want us to sell our oil in the global markets and will take as much as we can offer. At the same time there will not be any pressure on Canadian producers to increase
supplies,” he said.
Canada ranked fifth in ability to increase oil production