More than half of Canada’s oil is extracted from oil sands facilities like this one near Fort McMurray, Alberta viewed on July 10, 2012.

More than half of Canada’s oil is extracted from oil sands facilities like this one near Fort McMurray, Alberta viewed on July 10, 2012.
Photo Credit: Jeff McIntosh/Canadian Press

Canada’s oil production may slow or freeze: agency

The International Energy Agency warns Canada’s oil production could slow or come to a “complete standstill,” reports Canadian Press. The organization was founded after the 1973 oil crisis and members include 29 oil-producing countries.

Its report released today forecasts production levels to 2021. It says a glut of oil will prevent prices from recovering until next year. That is later than it had previously forecast.

Oil costly to extract

Canada has the third largest oil reserves in the world, according to government statistics. About 58 per cent of its oil is extracted from sands in an expensive and water-intensive process. Development has already slowed.

The agency blames environmental concerns, a need for pipelines to move product to new markets and political uncertainty in the oil-producing province of Alberta. A left-leaning government was elected there last year.

Canada’s oil output is expected to be 5.2 million barrels a day by 2021, forecasts the agency. Of that nearly 3.4 million barrels will come from Alberta.

(With files from CBC and Canadian Press)

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