TORONTO — Output from Canada’s oilsands could rise to as much as 6.3-million barrels a day by 2035, a nearly fivefold increase above current levels, according to a landmark U.S. report released Monday.


It was one of the findings by energy consultancy IHS Cambridge Energy Research Associates (CERA) in a study called Growth in the Canadian Oil Sands: Finding a New Balance. The study, which took eight months to research and was produced in consultation with many different stakeholders, looks at how the oilsands have morphed “from the fringe to the centre” of global energy supply and the resulting economic and environmental implications.


“The length and depth of the current economic recession, the pace of technological innovation as well as government regulation, particularly in addressing concerns about climate change, will all shape the growth of oilsands,” Daniel Yergin, chairman of Cambridge, Mass.-based IHS CERA, said in a statement.


To reach the theoretical level of 6.3 million barrels a day, the study assumes strong economic growth and robust oil prices over the long-term. If the global economy stagnates and oil prices remain weak, it is projecting daily production of 2.3 million barrels a day by 2035. That is still about one million barrels a day above current levels.


The numbers show just how important Canada’s oil will become to the United States, as the study predicts that Canada would account for 37 per cent of U.S. oil imports if production is ramped up to 6.3 million barrels a day. It was just 19 per cent in 2008, CERA said.


The report comes at a difficult time for the once-booming oilsands, as major development projects are being curtailed or downsized because of the crash in global oil prices, which are down 60 per cent from their peak last summer.


The environmental impact of oilsands mining has become a major political concern as well, as Canadian officials fear that the United States will push harder to block imports of “dirty oil.” U.S. legislators are debating a climate-change bill that would introduce new environmental compliance costs and make oilsands crude even more expensive to produce.


Oilsands companies have fought back by pointing out the importance of their resources to global supply. Last week, Imperial Oil Ltd. chief executive Bruce March said it is unrealistic to exclude oilsands crude from North America’s future energy mix.


CERA said that Canada and the U.S. should create a joint framework for regulating greenhouse gas emissions to reduce market distortions and prevent any trade conflicts. It also pointed to technological innovation to address environmental challenges.


When it comes to the environmental damage from oilsands operations, the study suggests that the impact on global warming may not be as extreme as some opponents to the oilsands suggest.


CERA said that extracting crude from the oilsands emits far more greenhouse gases compared with the average barrel consumed in the United States. However, it said that when a “well-to-wheels” analysis is used, which measures emissions from extraction all the way to consumption, oilsands emissions are only five per cent to 15 per cent higher than the average barrel processed in the U.S. That is because 70 per cent to 80 per cent of total carbon emissions from crude oil come from burning refined products like gasoline, CERA claims.


Canwest News Service